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).

Read more

'Stick-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:

Read more

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.

Read more

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.

Read more

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:

Read more

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.

Read more

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.

Read more

8 Things to Know About the Living Wage

8 Things

There has been a lot of discussion about “living wages” in recent years – in Australia, and internationally. And now the idea has become a hot election topic. The ACTU wants the government to boost the federal minimum wage so it’s a true living wage. Opposition leader Bill Shorten has hinted he’s open to the idea. Business leaders predict economic catastrophe if the minimum wage is increased.

As the debate heats up, here’s a quick guide to 8 things you need to know about the living wage:

Read more

Job Creation Record Contradicts Tax-Cut Ideology

by Jim Stanford

The Australian Bureau of Statistics released its detailed biennial survey of employment arrangements this week (Catalogue 6306.0, "Employee Earnings and Hours"). Once every two years, it takes a deeper dive into various aspects of work life.

Buried deep in the dozens of statistical tables was a very surprising breakdown of employment by size of workplace.  It turns out, surprisingly, that Australia's biggest workplaces (both private firms and public-sector agencies) have been the leaders of job-creation over the last two years.

This runs against the common refrain that small business is the "engine of growth."  In fact, workplaces with less than 50 employees actually shed employees (14,000 in total) since 2016.  Curiously, it was only smaller businesses that received the much-vaunted reduction in company tax (from 30 to 27.5 per cent), also beginning in 2016.

Read more

The REAL Diary of an Uber Driver

ABC recently announced plans for a new 6-part television drama called “Diary of an Uber Driver.”  The Centre for Future Work's Director Jim Stanford wonders if this drama will truly constitute insightful drama - or whether it will serve to whitewash the labour practices of a controversial, exploitive industry.

A version of this commentary originally appeared on the 10 Daily website.

Read more


ACNC_Registered_Charity_Logo

get updates