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Update January 2021: Further JobKeeper and JobSeeker supports have been withdrawn.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
The latest economic statistics have confirmed that Australia's economy is barely limping along - with quarterly GDP growth of just 0.4%. One of the weakest spots in the report was consumer spending, which recorded its weakest performance since December 2008 (amidst the worst days of the Global Financial Crisis). This was despite the supposed benefit of recent Commonwealth government tax cuts in boosting disposable income and stimulating more spending.
Analysis from Dr. Jim Stanford shows that the tax cut is in fact completely invisible in the macroeconomic data.Read more
The national roll-out of the NDIS holds the prospect of a significant enhancement in both the resources allocated to disability services in Australia, and the autonomy and flexibility of service delivery for people with disability. But it also constitutes an enormous logistical and organisational challenge. And the market-based service delivery model built into the NDIS is exacerbating those challenges, by unleashing a widespread fragmentation and casualisation of work in disability services.
In this new report, researchers document the experience of front-line disability service workers under the NDIS based on first-hand qualitative interviews.Read more
Wednesday 20 November is the 11th annual "Go Home on Time Day," sponsored by the Centre for Future Work and the Australia Institute.
It's a light-hearted effort, once per year, to remind Australians of the value of leisure time – and to push back against the increasingly common expectation that workers should put in extra hours for their employers, without pay.Read more
New research from the Centre for Future Work shows that scheduled increases in employers’ minimum statutory superannuation contributions would have no negative effects on future wage growth, and that Australia’s economy can afford both higher wages and higher employer contributions to superannuation.
The research refutes claims made by some commentators and lobbyists that higher superannuation contributions would automatically lead to lower wages, and hence would be self-defeating. The new research finds no statistical evidence for that claim in Australian empirical data.Read more
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