Young Workers are "Shock Troops" of Precarious Labour Market

Dr. Jim Stanford, Director of the Centre for Future Work, appeared before the National Youth Commission on 31 October in Sydney to discuss the challenges facing young workers in Australia's labour market.

The National Youth Commission into Youth Employment and Transitions has been holding an inquiry in communities across Australia to document the situation of young workers, who are experiencing much lower rates of employment and income than other workers.

Stanford's submission argued that young workers are like the "shock troops" of the precarious labour market: the ones sent in first to confront an especially dangerous situation. The rise of precarious work in all its forms - part-time work, casual jobs, labour hire, temporary positions, marginal self-employment, and digitally mediated 'gigs' - now dominates youth employment patterns. And that situation will not automatically disappear as young workers get older and gain experience. Rather, evidence suggests that without policy measures to stabilise and improve jobs, this will be a permanent shift that gradually affects most workers. Already, less than half of employed Australians are working in a 'traditional' full-time permanent wages jobs with normal entitlements (like paid holidays, sick leave, and superannuation). For young workers, that ratio is less than one in five.

Stanford argued for targeted measures to stimulate more youth hiring into stable positions, an ambitious effort to rebuild vocational education in Australia and strengthen pipelines to post-education jobs, and a broader commitment to full-employment macroeconomic policy.

Please see the full Centre for Future Work submission.


Job Opportunity: Research Economist

The Centre for Future Work invites applications for an economist to join our research team in labour market research and policy analysis. The position may be at a junior or senior level, and the successful candidate may work from our offices in either Sydney or Canberra.

Application details below:

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Paid Parental Leave for Fathers Advances Parental Equality

Rising pressure on individuals and families to meet their caring needs is the “human face” of decline in workplace protections and bargaining power that has gathered pace since 2013. Meanwhile, the need for fathers and male spouses to take on more caring and household labour is routinely discussed in the public domain. But how have Australia’s work/care policies worked to support a redistribution of caring and household labour to males and fathers?

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Surprise: Newstart Doesn't Cause Unemployment!

Australia's Newstart benefit hasn't been increased in real terms in a generation, and pressure is growing on the Commonwealth government to address this inequity and raise the rate. Even RBA Governor Philip Lowe has indicated that better Newstart benefits would stimulate consumer spending and support the economy.

But the government continues to reject the idea, and instead has fostered lamentable and divisive rhetoric about "dole bludgers" and the supposed lack of "aspiration" among unemployed Australians. Old stereotypes about unemployed people choosing to subsist on poverty-level benefits, instead of looking for work, have been invoked.

In this guest commentary, Prof. Raja Junankar of UNSW University shows that keeping the Newstart Allowance constant in real terms at a poverty level does not help the unemployed find jobs more rapidly. Despite rock-bottom benefits that have declined notably relative to average wages, long-term unemployment has increased -- including among vulnerable groups of workers (like younger and older workers).

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'Stuck-in-the-Mud' Workers Not to Blame for Wage Stagnation

The Commonwealth Treasury raised eyebrows recently with a new research report that seemed to pin the blame for record-weak wage increases on workers' reluctance to quit their jobs in search of better-paying alternatives. The report was presented to the recent conference of the Economic Society of Australia, and elicited gleeful headlines in conservative newspapers blaming "stubborn" workers for their own poor wage results.

In this commentary, which originally appeared in 10 Daily, Dr Jim Stanford argues that Treasury has mis-identified the true source of the problem. With so few decent job opportunities available, it's rational that many workers would choose to stick with their current jobs - despite stagnant wages and poor conditions.

Here is the full commentary:

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Minimum Wage to Rise 3% for 2019-20

The Fair Work Commission has announced a 3% hike in Australia’s national Minimum Wage, effective July 1, taking it to $19.49 per hour. That increase is lower than the 3.5% increase implemented last year.

In our judgment, this is inadequate to meet the needs of low-wage workers -- and the needs of Australia's macroeconomy.

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Denying Wages Crisis Won't Make It Go Away

As the great novelist Isaac Asimov wrote, “The easiest way to solve a problem is to deny it exists.” Business leaders and sympathetic commentators have adopted that advice with gusto, during current public debates over the unprecedented weakness of Australian wages.

Even as Australian voters express great concern over stagnant wages, and strong support for policy measures to boost wages (like restoring penalty rates and lifting minimum wages), business leaders continue to claim that wages are doing just fine, thank you.

In this commentary, Centre for Future Work director Jim Stanford challenges this attitude of denial. The empirical evidence is overwhelming, he argues, that traditional wage mechanisms have broken down in Australia - and as a result workers are not getting a healthy share of the productivity they produce.

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Economics 101 for the ABCC

The Australian Building and Construction Commission's decision to press charges against 54 steelworkers for attending a political rally, with potential fines of up to $42,000 per person, is abhorrent on any level. No worker should face this kind of intimidation for participating in peaceful protest.

But why is the ABCC, established to police construction workers and their unions, now going after steelworkers? It claims that since the factory they work at sells steel to construction sites, it is in effect part of the construction industry. But that claim, if taken seriously, means that the whole economy -- and all workers -- are subject to the ABCC's crusade.

In this commentary, Jim Stanford explains the basic economics of supply chains to the autocrats at the ABCC:

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Budget 2019-20: Ooops, They Did It Again!

You would think that after 5 consecutive years of wage forecasts that wildly overestimated actual experience, the government might have learned from its past errors – and published a wage forecast more in line with reality. But not this government. They are still trying to convince Australian workers, who haven’t seen real average wages rise in over 5 years, that better times are just around the corner. And rosy wage forecasts are helpful in justifying their equally optimistic revenue forecasts: since if Australians are earning more money, they will be paying more taxes!

So the 2019-20 Commonwealth budget, tabled Tuesday evening by Treasurer Josh Frydenberg, featured another valiant prediction that fast wage growth is indeed still “just around the corner.” Despite a slowdown in wage growth in the last months of 2018, this budget simply replicates last year’s wage forecast – but delayed by one more year. Crucially, there  is no discussion justifying why Australian workers might have confidence in this year’s forecast, when the last five so widely missed the mark (and always in the same direction).

Our analysis of the 2019-20 Commonwealth budget focuses on the wages crisis facing Australian workers, and challenges the claim that cutting personal tax cuts can somehow compensate workers for the fact that their wages are not growing.

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A Historic Opportunity to Change Direction

A unique conjuncture of economic and political factors has created an opportunity for a historic change in the direction of Australia's workplace and industrial policies. That's the conclusion of Dr. Jim Stanford, Economist and Director of the Centre for Future Work, in a major review article published in Economic and Labour Relations Review, an Australian academic journal.

In a broad overview of the current problems in Australia's labour market, and the weaknesses of existing labour market policies, Stanford argues that the prospects are ripe for a fundamental shift in the emphasis of Australian industrial laws and labour standards.

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