For the last generation macroeconomic policy in Australia has been based on the assumption that unemployment must be maintained at a certain minimum level in order to restrain wages and prevent an outbreak of accelerating inflation. Now, after six years of record-low wage growth – which weakened even further in the latest ABS wage statistics – it is time for that policy to be abandoned.
In a comprehensive critique of unemployment and monetary policy in Australia, Senior Research Fellow David Richardson shows there is no stable statistical basis for the assumption that inflation will accelerate without end if unemployment falls below its so-called "natural" or "non-accelerating inflation rate" (NAIRU, commonly thought to be around 5%). And the economic and social costs of deliberately maintaining high unemployment are very large.Read more
The Centre for Future Work has partnered with HESTA, the industry super fund for workers in health care and community services, to prepare a comprehensive report on the economic and social status of women in Australia today. The report shows that while progress has been made in some key areas, women continue to confront systematic barriers to their full participation in paid work, fair pay, retirement security, safety, and recognition.Read more
Coalition leaders hardly mentioned industrial relations topics during the recent federal election campaign, but now that the party is back in power, an aggressive and wide-ranging agenda for changing Australia's labour laws has been quickly assembled—with the enthusiastic backing of business lobbyists.
In a new report, Centre for Future Work Senior Economist Alison Pennington has compiled the various proposals advanced by employers, and shows that together they would constitute a thorough reorientation of Australia's collective bargaining system. The end result would be a situation (very similar to the Work Choices regime of the late 2000s) whereby employers have unilateral power to determine terms and conditions, wages can be locked in for very long periods of time (contrary to employer's calls for greater "flexibility"), and the scope for true workplace negotiations is compressed.Read more
Despite its deafening silence on industrial relations issues during the recent election, the re-elected Coalition government is charging ahead with an aggressive plan to change Australia's labour laws. And business lobbyists are lining up to endorse its direction. First out of the gate is a plan to amend the Fair Work Act, in the cynically mis-named "Ensuring Integrity" bill, to introduce harsh new sanctions on unions and union officials.
Our Director Dr. Jim Stanford was recently invited to testify before the Senate Standing Committee on Education and Employment on the bill, and its likely economic and social consequences.Read more
July 1 marked the implementation of the next stage of reduced penalty rates in the retail and hospitality industries in Australia. It is now two full years since the first reductions were imposed for Sunday and holiday work in several segments of retail and hospitality. Once fully phased in, these reductions will reduce wage payments in the two broad industries by an estimated $1.25 billion per year -- at a time when concerns over weak wages and their impacts on the Australian economy are growing.
Employers argued before the Fair Work Commission that if their Sunday and holiday labour costs were reduced, they would hire more workers, and the Commission cited this logic in accepting employer demands for lower penalties. Now, with two full years of experience since the first reductions, there is growing evidence that the penalty rate reductions have not spurred job creation in retail and hospitality. To the contrary, our new report shows that employment growth in retail and hospitality has been far slower than in other parts of the economy (where penalty rates remained constant) -- and job-growth in the two sectors actually slowed by more than half after penalty rates began to fall.Read more
Australia’s economy continues to endure historically slow growth in wages and salaries, that is undermining household incomes, consumer spending, and economic growth. The Commonwealth government continues to predict an imminent rebound in wages – like in its most recent budget, where it yet again forecast wage growth accelerating quickly to 3.5% per year. But is the government willing to actually do anything to support wages?
The Centre for Future Work has released new research showing that just 3 specific actions by the Commonwealth government would lead to a significant rise in national wage growth, adding over $10 billion per year to aggregate wage income within three years. That doesn’t single-handedly solve the whole wages crisis, but it would be a big improvement.Read more
International evidence is clear that there is a strong, positive correlation between a country’s protection of labour freedoms, and the organising success and economic influence of unions. Improvements in basic labour rights and freedoms tend to be associated with increases in union membership (as a share of total employment). And stronger union membership, in turn, is associated with broader collective bargaining coverage, less poverty among working people, and less inequality.
Australia has a poor record of protecting basic worker and labour rights and freedoms: including rights to assembly, rights to organise, rights to due process, and rights to strike. According to the World Economic Forum (a generally business-friendly international policy organisation), Australia ranks 5th last among OECD countries in protecting worker rights.
A new study from the Centre for Future Work documents the correlation between workers' rights and union organising - and shows they are two sides of the same coin. And that correlation between workers' rights and the success of unions suggests that unions in Australia will need to continue their campaign to "Change the Rules" of Australia's labour market (including improving basic rights for workers to organise, bargain collectively, and take industrial action). Winning better legal and regulatory protections for workers seems essential to workers' ability to build stable, influential unions, and use those unions to improve their lives.Read more
Centre for Future Work Economist Alison Pennington recently gave a keynote address to hundreds of delegates at the ATIA International Taxi Conference, held this year in Gold Coast, QLD.
Her presentation discussed the historical, economic, and moral context for the rise of "gig-economy" businesses, such as Uber. She reviewed Uber's business model, and the company's recent IPO, in detail, arguing that it depends on underpayment of its drivers -- who for all practical purposes are "employees," even if current labour laws do not always explicitly recognise them as such.
Growing competition, regulatory and legal problems, and growing resistance to the ultra-precarious and low-wage incomes offered in this type of work suggest that the future success of digital platform businesses like Uber is very much in doubt.
Pennington also referenced findings of our previous paper estimating the net incomes of Uber-X drivers in 6 Australian cities.
Please view Alison Pennington's full presentation here.