The Wages Crisis in Australia:
What it is and what to do about it
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.Read more
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.Read more
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.Read more
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.Read more
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.
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.Read more
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.Read more
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.Read more
Jobs providing essential public services – like health care, education, safety, parks, and more – are a pillar of strength in Australia's labour market. Public sector jobs are generally good jobs, with decent pay and more security than is typical of many private sector positions. The strategic importance of public sector work is all the more visible in regional communities. Job-creation in private businesses hasn't been adequate to meet the needs of most regional communities, as private activity is increasingly concentrated in the major cities. So good jobs in schools, hospitals, and public administration are essential to the well-being of regional towns. Public service workplaces in smaller communities also function as economic "anchors": keeping the local economy well grounded, and supporting many spin-off jobs in the private sector (in consumer goods and services, transportation, construction, and more).
Unfortunately, the positive economic potential of public sector work in regional communities has been undermined in recent years by misguided policies of fiscal austerity, which have placed more emphasis on cutting government spending than on supporting regional communities. A new report from the Centre for Future Work documents the erosion of public sector work in regional communities in NSW, relative to overall labour market growth. From 2011 to 2016 alone, this relative shrinkage was equivalent to the loss of 6000 public sector jobs in regional communities in the state. Of the 20 communities which experienced the greatest loss of public sector jobs in NSW in that period, 18 were located in regional NSW.Read more
Australian governments could help to solve the problem of stagnating wages by better leveraging their own spending power in support of better wages and working conditions. That’s the conclusion of new research from the Centre for Future Work at the Australia Institute on the connection between government spending and procurement and working conditions across the economy.Read more