On the Brink: The Crisis in Private Sector Collective Bargaining

Australia’s enterprise bargaining system is crumbling rapidly in private sector workplaces, according to dramatic findings from the Centre for Future Work.

The report shows that the number of current enterprise agreements in private Australian businesses has collapsed by 46% since the end of 2013.  The number of private sector workers covered by enterprise agreements has plunged 34% in the same time. In 2017, just 12% of employed private sector workers were covered by an enterprise agreement – down from 19% in 2013.

If current trends in renewals, new agreements, and terminations continue, less than 1700 agreements would survive to 2030, at which point just 2% of private sector workers would be covered by a collective agreement.

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Private Sector Wage Growth Still in Doldrums

New data on private-sector business conditions confirm that wage increases paid in the private sector of Australia’s economy continue to plumb record lows.

The ABS’s quarterly Business Indicators report, released yesterday, indicates total wages and salaries paid out by private businesses grew 4.3 percent in the September quarter, compared to year-earlier levels. This only slightly exceeded the increase in total private sector employment during the same period. As a result, wages and salaries paid per employed worker grew very slowly – by just 0.43 percent over the year.

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New Book: The Wages Crisis in Australia

 

The Wages Crisis in Australia:

What it is and what to do about itCover

Edited by Andrew Stewart, Jim Stanford, and Tess Hardy (University of Adelaide Press)

Australian wage growth has decelerated in recent years to the slowest sustained pace since the 1930s. Nominal wages have grown very slowly since 2012; average real wages (after adjusting for inflation) have not grown at all. The resulting slowdown in personal incomes has contributed to weak consumer spending, more precarious household finances, and even larger government deficits.

The wage slowdown has elicited concern from economists and political leaders across the spectrum. Even Dr. Philip Lowe, Governor of the Reserve Bank of Australia, has called it a "crisis," and suggested that faster wage growth would be beneficial for the economy.

This new collection of 20 essays by leading labour market experts and commentators in Australia explores the causes, consequences, and potential solutions to this problem.  The book is published by University of Adelaide Press. The book was launched in Melbourne on 29 November, with remarks from Natalie James, former Commonwealth Fair Work Ombudsman and Chair of the Victorian Inquiry Into the On-Demand Workforce.

Through the links below you may access excerpts from the book, links to participating authors, and supplementary material (including commentary, other readings, and videos). Our hope is that this collection will spark a needed debate in Australia about how to get wages back on track.

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Go Home on Time Day 2018

Wednesday 21 November is Australia's official "Go Home On Time Day," sponsored by the Centre for Future Work and the Australia Institute. This represents the 10th year of our initiative, to provide light-hearted encouragement to Australian workers to actually leave their jobs when they are supposed to. Instead of working late once again - and allowing your employer to "steal" even more of your time, without even paying for it - why not leave the job promptly. Spend a full evening with your family or friends, visit the gym, see a movie - do anything other than work.

Please visit our special Go Home On Time Day website for more information, tips on how to get away from work on time, and free posters and shareables.  There's also an online calculator where you can estimate the value of the time theft you experience, through unpaid overtime in all its forms.

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Sectoral Collective Agreement Could Combat Finance Industry Misconduct

The Royal Commission into the financial services industry has heard tens of thousands of incidents of financial misconduct. The problem is clearly not just a “few bad apples”; the problem is clearly rooted in the core structure and practice of this industry.

However, when it comes to fixing this mess, the Commission’s recent interim report provided no clear answers. Consumer education, self-regulation by banks, and even stronger enforcement efforts by government regulators all have their drawbacks. But there’s another solution that Commissioner Kenneth Hayne has so far overlooked: sector-wide collective bargaining to establish uniform, ethical pay practices across the financial industry.

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Exploring the Decline in the Labour Share of GDP

The share of total economic output in Australia that is paid to workers (in the form of wages, salaries, and superannuation contributions) has been declining for decades. Workers produce more real output with each hour of labour (thanks to ongoing efficiency improvements and productivity growth), but growth in real wages has been much slower - and recently, real wages haven't been growing at all. The result is that labour's slice of the economic pie has been getting smaller. In fact, a recent Centre for Future Work report showed that in early 2017 the labour share of GDP hit its lowest level since the Australian Bureau of Statistics began collecting quarterly GDP data.

To explore the causes and consequences of this decline in workers' share of national income, the Centre for Future Work convened a special panel of experts at the Society for Heterodox Economists conference at UNSW in Sydney last December. The papers presented at that panel have been peer-reviewed and just published in the Journal of Australian Political Economy. We are very pleased to co-publish the 4 papers here.

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Possibly Surprising Insights on the Future of Work

Trade unionists are gathering this week at the ACTU's triennial Congress in Brisbane.  Jim Stanford, Director of the Centre for Future Work, participated in a panel on the Future of Work (an apt title!) at the Congress.

Here is his presentation: 5 Possibly Surprising Insights on the Future of Work.

More detail on the issues raised in his presentation is provided in the Centre's recent submission to the Senate Inquiry on the Future of Work and the Future of Workers.


Penalty Rate Cuts: Where's the Jobs Boom??

On 1 July 2018, workers in several retail and hospitality industries will experience a second reduction in the penalty rates they receive for working on Sundays and public holidays.  The reductions were ordered by the Fair Work Commission, and follow an initial reduction imposed on 1 July 2017.

Employer representatives argued that by reducing labour costs for work on Sundays and holidays, lower penalty rates would spur a big expansion in employment, via both new hiring and longer hours for existing workers.  One lobbyist predicted 40,000 new jobs.  Another said improved employment was "a certainty."

But a new report from the Centre for Future Work has examined employment and working hours in the retail and hospitality industries in the year since the first penalty rate reduction.  Far from spurring a jobs boom in the two sectors, they have actually significantly underperformed the rest of the economy on all of the indicators considered.

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Advanced Skills for Advanced Manufacturing

Australia's manufacturing industry is at a crossroads.  After years of decline, the sector has finally found a more stable economic footing, and many indicators point to an expansion in domestic  manufacturing in the coming years.  Manufacturing added almost 50,000 new jobs in the last year - making it one of the most important sources of new work in the whole economy.

However, one key factor that could hold back that continuing recovery is the inability of Australia’s present vocational education and training system, damaged by years of underfunding and failed policy experimentation, to meet the needs of manufacturing for highly-skilled workers.  The skills challenge facing manufacturing is all the more acute because of the transformation of the sector toward more specialised and disaggregated advanced manufacturing  processes.  This naturally implies greater demand for highly-trained workers, in all its occupations: production workers, licensed trades, technology specialists, and managers.

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The Dimensions of Insecure Work

Less than half of employed Australians now hold a “standard” job: that is, a permanent full-time paid job with leave entitlements.  That’s the startling finding of a new report on the growing insecurity of work published by the Centre for Future Work.

The report, The Dimensions of Insecure Work: A Factbook, reviews eleven statistical indicators of the growth in employment insecurity over the last five years: including part-time work, short hours, underemployment, casual jobs, marginal self-employment, and jobs paid minimum wages under modern awards.

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