The COVID-19 pandemic has ushered in an era of unprecedented disruption and transition. Increased public investment in the skills and earning capabilities of Australians will be critical to our post-pandemic recovery.
New research from the Centre for Future Work An Investment in Productivity and Inclusion finds despite chronic underfunding and failed market-led VET policies, Australia’s historic investment in the TAFE system continues to generate an enormous and ongoing dividend to the Australian economy. The TAFE system supports $92.5 billion in annual economic benefits through the direct operation of TAFE institutes, higher incomes and productivity generated by the TAFE-credentialed workforce, and reduced social benefits costs.
“The Australian economy is reaping an enormous flow of economic benefits from a VET ‘house’ built by the TAFE system. But the ‘house’ that TAFE institutes built is crumbling. If Australia wants to secure the benefits of a superior, productive TAFE-trained workforce as we prepare for post-COVID reconstruction, the damage must be repaired quickly," said Alison Pennington, Senior Economist with the Centre for Future Work and author of the report.Read more
New research from the Centre for Future Work reveals that Australia ranks last among all OECD countries for manufacturing self-sufficiency. The COVID-19 pandemic has reminded Australians of the importance of being able to manufacture a full range of essential equipment and supplies; and the COVID recession has created a large economic void that a revitalised manufacturing sector could help to fill in coming years.
This new report, A Fair Share for Australian Manufacturing, describes the strategic importance of the manufacturing sector to Australia's future prosperity, and provides an inventory of policy tools that could help rebuild the sector to a size proportional to our domestic needs for manufactured products.Read more
With disruptions in international supply chains for essential products (like medical equipment and supplies) disrupted in the current COVID pandemic, Australians have a new appreciation for the importance of retaining a flexible, high-quality, domestic manufacturing capacity. And the ongoing transformation of Australia's energy industry, with rapid expansion of renewable energy sources, would add momentum to the renaissance of Australian manufacturing.
That is the conclusion of a new study written by Dan Nahum, Economist at the Centre for Future Work.Read more
COVID-19 containment measures have suspended large sections of the economy. Governments have committed over $220 billion in income supports to workers and firms. The $130 billion JobKeeper wage subsidy scheme is the most extensive “shock absorber” (with worrying exclusions of many casual and migrant workers). With the scheme now in place, assessment of the government’s COVID-19 measures is now shifting to implementation. This includes effects on the laws and regulations governing wages and how businesses and employees (and their unions) interact to determine the terms and conditions of employment.
Despite enduring a heightened anti-union agenda, unions (headed up by ACTU) liaised early with government to secure the JobKeeper wage subsidy to prevent mass layoffs. Unions have negotiated with industry to adapt Awards and enterprise agreements (EAs) to new business conditions. The Coalition government has proceeded with significant changes to the Fair Work Act that could hamper efforts to drive an inclusive economic and labour market recovery. What's more, the Morrison government has indicated it will continue its pre-COVID agenda to further weaken representation rights and minimum labour laws.
To inform assessment of the impacts of COVID-19 on jobs, wages, and workplace protections, we have summarised major developments within the industrial relations system since March 2020. The log traces revisions to Awards, enterprise agreement-making rules, new instruments formed between unions and industry, major decisions by the Fair Work Commission, and ongoing lobbying efforts by business to weaken minimum labour laws. Links to relevant research from Centre for Future Work released during the crisis, or prior to, are provided. All log entries are reported in the industrial relations publication Workplace Express. Links to other media outlets are provided where relevant.
If there are any major IR developments that we have not reported here please get in touch at email@example.com.Read more
With many regular workplaces shut down to 'flatten the curve' of COVID-19, millions of Australians are now shifting their work to home. Home work has great potential to cushion the economic blow of the pandemic: allowing many to keep working and earning an income, and many firms and industries to continue at least partial production. But there are also many challenges and risks associated with this major shift in work patterns. Much of the increase in home work will likely become permanent, even after the immediate health emergency passes. That makes it crucial to 'get home work right': providing home workers with appropriate support and protections, and preventing abuse and exploitation as home work becomes more common.
This new Briefing Paper from the Centre for Future Work, written by Alison Pennington and Jim Stanford, surveys the scope of home work, considers its impacts on economic and gender inequality, and proposes several policy recommendations to make home work safer and fairer.Read more
The Commonwealth government's proposed JobKeeper wage subsidy scheme represents an important and promising response to the COVID-19 shutdown of several key sectors of Australia's economy. The scheme would support an estimated $130 billion worth of wage payments over the coming 6 months, keeping millions of Australians in jobs even if their employers experience major revenue losses from the restrictions that have been imposed on activity, mobility, and work during the pandemic.
However, the program as originally proposed contains several design flaws that will seriously undermine the effectiveness of the program if they are not fixed.Read more
The Centre for Future Work has made a submission to the 2020 annual wage review conducted by the Fair Work Commission. The submission compiles evidence showing that the annual minimum wage adjustments (which flow through into wages specified in the Modern Awards, as well as some enterprise agreements and individual contracts) have played a more important role in recent years in supporting the overall level of wage growth in Australia's labour market. Without relatively strong minimum wage increases since 2017 (of 3% or higher for three consecutive years), Australian wage growth would still be languishing at all-time record lows of under 2% per year.
In this context, the Centre argued it is vital the Commission proceed with a normal, healthy minimum wage increase for 1 July, 2020, with full flow-through into Award wages. Otherwise wage growth will slump significantly (to an estimated 0.7%, or even lower), heightening the risk of economy-wide deflation.Read more
The Australian government has pushed back against introducing needed measures to support workers in casual, self-employed, or gig positions during the unprecedented labour market turmoil resulting from the COVID-19 pandemic. Other countries, however, are moving quickly with unprecedented measures to support jobs and incomes for all workers - including those in non-standard employment - to ensure they can take necessary time away from work, and do not lose their livelihoods as a result of the virus. We have assembled a catalogue of international initiatives aimed at achieving these dual outcomes.
Update January 2021: Further JobKeeper and JobSeeker supports have been withdrawn. As of 4 Jan 2021, the JobKeeper subsidy is now at a maximum of $1000 per fortnight until 28 March 2021. The JobSeeker coronavirus supplement has been reduced to $150 per fortnight until 31 March 2021. We are concerned that the government is withdrawing supports too fast and too soon, especially as intermittent outbreaks of the COVID-19 virus, and concomitant lockdowns, continue in various Australian states.
We have added further information on the US response.
Update September 2020: The JobKeeper subsidy has been extended from 28 September 2020 to 28 March 2021, at incrementally lower rates as this period continues. In brief, the JobKeeper wage subsidy will continue until March next year, but payments will fall from $1500 to $1200 a fortnight after September (or $750 for those working less than 20 hours per week). The JobSeeker coronavirus supplement will continue until December but fall from $550 to $250 a fortnight, meaning people on the program will receive $815 a fortnight after September.
The Commonwealth is providing $1500 of paid pandemic leave in Victoria, New South Wales, Western Australia, and Tasmania for workers who need to self-isolate either because they are suffering from the virus or because they are caring from someone who is. At this stage, other states and territories have not signed onto this agreement.
We have added further information on the UK's response.
Update July 2020: Governments around the world continue to take extraordinary measures to contain the economic damage associated with COVID-19. The Australian government has flagged that it will end the JobKeeper wage subsidy and the JobSeeker COVID subsidy (essentially doubling the unemployment benefit) in September, and has already done so for childcare, with negative on-effects for both a particularly feminised workforce and for working women more broadly. Given that economic conditions continue to worsen despite the government's efforts thus far, it is hard to see how ending JobKeeper across the board would be either politically or economically feasible. In contrast, internationally, governments are expanding economic measures, including those specifically aimed at young workers.
Update March 2020: The Australian government announced a massive $130 billion wage subsidy program, to catch up with similar schemes that have been implemented in other countries (described in detail below). This is a welcome development, attributable largely to the advocacy of the ACTU and its affiliated unions. However, there are several weaknesses in the design of the scheme – most acutely, the fact that it excludes over 2 million short-tenure casual workers and foreign visa workers. Watch this site for a more detailed analysis of the pro’s and con’s of the government’s package. And we will continue to update the catalogue below with relevant developments from other countries as the world continues to respond to the COVID-19 pandemic.
While women have made some progress in closing the wage gap and other dimensions of gender inequality in Australia, they still face daunting and persistent barriers to their full participation and compensation in Australia's economy.
That's the conclusion from a new Factbook on gender economic inequality in Australia, released by the Centre for Future Work to coincide with International Women's Day on 8 March.Read more
New research from the Centre for Future Work has dramatised the lasting consequences for workers' lifetime incomes – even after they retire – of wage freezes.
A wage freeze is often described as a "temporary sacrifice," that supposedly ends once normal annual wage increments are restored. However, this report confirms that the legacy of even a temporary pay freeze is a permanent reduction in lifetime incomes and superannuation, which can easily ultimately result in hundreds of thousands of dollars of lost income. These long-term effects are illustrated with reference to a real-world example: an 18-month pay freeze imposed on workers at Jetstar in 2014-2016.Read more