Stuck-in-the-Mud’ Workers Not to Blame for Wage Stagnation
The Commonwealth Treasury raised eyebrows recently with a new research report that seemed to pin the blame for record-weak wage increases on workers’ reluctance to quit their jobs in search of better-paying alternatives. The report was presented to the recent conference of the Economic Society of Australia, and elicited gleeful headlines in conservative newspapers blaming “stubborn” workers for their own poor wage results.
Where To Now for Union Campaign? Workplace Express
The unexpected results of the 2019 Commonwealth election have sparked many commentaries regarding what happened, and why. This article, reprinted with permission from Workplace Express, considers the role of the major #ChangeTheRules campaign mobilised by Australian unions in the lead-up to the election – and ponders the movement’s next steps in the continuing debate over labour market policies and industrial relations. It cites both our Economist Alison Pennington, and our Director Jim Stanford, as well as our previous research on the erosion of collective bargaining in Australia.
Jobs and a Living Wage
Australians tend to bring a fair bit of swagger to international comparisons of economic performance. After all, Australia has experienced twenty-eight consecutive years of economic growth without a recession—a record for industrial countries. We are the ‘lucky country’, with one of the highest material living standards in the world, a wealth of natural resources, and a ‘no worries’ ability to withstand global economic shocks.
Job Creation Record Contradicts Tax-Cut Ideology
The Australian Bureau of Statistics released its detailed biennial survey of employment arrangements this week (Catalogue 6306.0, “Employee Earnings and Hours“). Once every two years, it takes a deeper dive into various aspects of work life. Buried deep in the dozens of statistical tables was a very surprising breakdown of employment by size of workplace.
The REAL Diary of an Uber Driver
ABC recently announced plans for a new 6-part television drama called “Diary of an Uber Driver.” The Centre for Future Work’s Director Jim Stanford wonders if this drama will truly constitute insightful drama – or whether it will serve to whitewash the labour practices of a controversial, exploitive industry.
Australia’s Upside-Down Labour Market
Workers produce more, but get paid less. Business invests less in real capital, but their profits grow. Technology advances at breakneck pace, but so many jobs are degraded and menial (not to mention horribly paid). What gives? Australia’s labour market truly seems “upside down.”
The Year Past, and the Year to Come
Workforce (a labour relations bulletin published by Thomson-Reuters) recently surveyed major IR figures in Australia on what they saw as the big issues in 2018, and what they expect as the major talking points for 2019. Jim Stanford, economist and Centre for Future Work director, was one of those surveyed, and here are his remarks. What
Industry-Wide Bargaining Good for Efficiency, as Well as Equity
In this commentary, Centre for Future Work Associate Dr. Anis Chowdhury discusses the economic benefits of industry-wide collective bargaining. In addition to supporting wage growth, industry-wide wage agreements generate significant efficiency benefits, by pressuring lagging firms to improve their innovation and productivity performance. The experience of other countries (such as Germany and Singapore) suggests that
Are States Filling the Democratic Void?
The recent Victorian election results showed Australian voters want governments to play a pro-active role delivering public services, infrastructure, improved labour standards, and sustainability. They showed that in a time of deep cynicism with federal politics, States (and Territories) can play an important role filling the democratic void left by dysfunction and policy paralysis at
“Permanent Casuals,” and Other Oxymorons
Recent legal decisions are starting to challenge the right of employers to deploy workers in “casual” positions on an essentially permanent basis. For example, the Federal Court recently ruled that a labour-hire mine driver who worked regular shifts for years was still entitled to annual leave, even though he was supposedly hired as a “casual.” This decision has alarmed business lobbyists who reject any limit on their ability to deploy casual labour, while avoiding traditional entitlements (like sick pay, annual leave, severance rights, and more). For them, a “casual worker” is anyone who they deem to be casual; but that open door obviously violates the intent of Australia’s rules regarding casual loading.
Insecure work: The New Normal
Most Australians know in their guts that it’s pretty hard to find a traditional permanent job these days. And now the statistics confirm it: less than half of employed Australians have one of those “standard” jobs. And more than half experience one or more dimensions of insecurity: including part-time, irregular, casual, contractor, and marginally self-employed jobs.
Wages Crisis Has Obvious Solutions
Mainstream economists and conservative political leaders profess “surprise” at the historically slow pace of wage growth in Australia’s labour market. They claim that wages will start growing faster soon, in response to the normal “laws of supply and demand.” This view ignores the importance of institutional and regulatory factors in determining wages and income distribution. In fact, given the systematic efforts in recent decades to weaken wage-setting institutions (including minimum wages, the awards system, and collective bargaining), it is no surprise at all that wages have slowed to a crawl. And the solutions to the problem are equally obvious: rebuild the power of those institutions, to support workers in winning a better share of the economic pie they produce.
The Difference Between Trade and ‘Free Trade’
U.S. President Donald Trump’s recent trade policies (including tariffs on steel and aluminium that could affect Australian exports) have raised fears of a worldwide slide into protectionism and trade conflict. Trump’s approach has been widely and legitimately criticised. But his argument that many U.S. workers have been hurt by the operation of current free trade
Job Growth No Guarantee of Wage Growth
Measured by official employment statistics, Australia’s labour market has improved in recent months: full-time employment has grown, and the official unemployment rate has fallen. But dig a little deeper, and the continuing structural weakness of the job market is more apparent. In particular, labour incomes remain unusually stagnant. In this commentary, Centre for Future Work Associate Dr. Anis Chowdhry reflects on the factors explaining slow wage growth — and what’s required to get wages growing.
Don’t Pop Champagne Corks Over Longest Growth Streak
On April 1, Australia will surpass the Netherland’s old record to mark the longest unbroken expansion of real GDP in modern history. While this result permits much chest-thumping on the part of some politicians, we should never assume that there is an automatic correlation between GDP growth and the well-being of people, society, and the environment.
Employers’ pyrrhic penalty rates win reflects self-defeating economics
The Fair Work Commission unveiled its long-awaited decision on penalty rates for Sunday and holiday work this week. Penalty rates for most retail and hospitality workers will be cut, by up to 50 percentage points of the base wage. Hardest hit will be retail employees: their wages on Sundays will fall by $10 an hour or more. For regular weekend workers, that could mean $6000 in lost annual income.
Denying The Downside Of Globalization Won’t Stop Populism
The rise of anti-globalization sentiment, including in Australia, poses a big challenge to mainstream politicians who’ve been trumpeting the virtues of free trade for decades.
The Flawed Economics of Cutting Penalty Rates
It was a “sleeper” issue in the recent election, and led to the defeat of some high-profile Liberal candidates. But now the debate over penalty rates for work on weekends and public holidays shifts to the Fair Work Commission. The economic arguments in favour of cutting penalties (as advocated by lobbyists for the retail and
Bracket Creep Is A Phoney Menace
For someone who piously bemoans an “us versus them” mentality in political culture, Treasurer Scott Morrison certainly drove a deep wedge into the social fabric with one of the centrepieces of his budget. There are four thresholds in the personal income tax system; Morrison chose to increase one of them, supposedly to offset the insidious effects of “bracket creep.” The third threshold will be raised from $80,000 to $87,000.
6 Reasons to Be Skeptical of Debt-Phobia
In the lead-up to tomorrow’s pre-election Commonwealth budget, much has been written about the need to quickly eliminate the government’s deficit, and reduce its accumulated debt. The standard shibboleths are being liberally invoked: government must face hard truths and learn to live within its means; government must balance its budget (just like households do); debt-raters will punish us for our profligacy; and more. Pumping up fear of government debt is always an essential step in preparing the public to accept cutbacks in essential public services. And with Australians heading to the polls, the tough-love imagery serves another function: instilling fear that a change in government, at such a fragile time, would threaten the “stability” of Australia’s economy.
State Income Taxes Would Promote Inequality and Debt
The latest “big idea” on tax policy from the Coalition government is to grant independent income tax powers to the states. This would be accompanied by a devolution of funding responsibility for big-ticket services like health care, hospitals, and schools. Prime Minister Turnbull argues that forcing state governments to raise the money they spend will
Company Tax Cuts: A Cautionary Tale from Canada
Was it really the Treasury’s economic modeling that convinced Prime Minister Turnbull to abandon his plan to raise the GST and cut income taxes? Treasury simulations indicated the trade-off would have no significant impact on growth. Or perhaps it was another kind of calculation – electoral – that convinced the Coalition to drop the idea, and the economic numbers just provided political cover.
Tanya Martin Executive Assistant
Jake Wishart Senior Media Adviser