A Historic Opportunity to Change Direction

by Jim Stanford


A unique conjuncture of economic and political factors has created an opportunity for a historic change in the direction of Australia’s workplace and industrial policies. That’s the conclusion of Dr. Jim Stanford, Economist and Director of the Centre for Future Work, in a major review article published in Economic and Labour Relations Review, an Australian academic journal.

In a broad overview of the current problems in Australia’s labour market, and the weaknesses of existing labour market policies, Stanford argues that the prospects are ripe for a fundamental shift in the emphasis of Australian industrial laws and labour standards.

“A combination of political and macroeconomic factors has created a historic opportunity to turn away from the individualised, market-driven labour market policy that has prevailed since the 1980s, in favour of a more interventionist and egalitarian approach,” Stanford writes.

He provides evidence on the dual failure of Australia’s job market: there is not enough work for those who want and need it, and the quality of work has deteriorated badly. Both of those problems have undermined wage growth in recent years. But longer-term structural changes in labour market and industrial policies are also to blame: “The deterioration in job quality and distributional outcomes is the long-term legacy of the post-1980s shift away from Australia’s earlier tradition of equality-seeking institutional structures and regulatory practice.”

Stanford argues that deep political and economic changes are opening a once-in-a-generation possibility for a redirection of labour and workplace policies. The political shift reflects more than just the traditional “horse race” between leading parties, as an election approaches. Rather, they reveal growing public frustration over the evaporation of the “fair go” and the dimming prospects for inclusive prosperity. These political shifts have broken the traditional bipartisan endorsement of business-friendly labour policies which shaped Australia’s labour market over the last generation.

At the same time, major macroeconomic challenges are reinforcing the need for a future Australian government to consider a different approach to supporting incomes and growth. The effects of restrictive labour policies on wages and inequality were moderated and disguised for some years by Australia’s vibrant investment and growth conditions. But now growth is slowing dramatically (due to the property price downturn, weak consumer finances, and weak business investment), and so the harsh effects of employer-oriented workplace policies are being felt undiluted by millions of working Australians.

“There is growing sentiment among many researchers, industrial relations practitioners and worker advocates that Australia’s current industrial relations and labour policy regime (with its reliance on an eroding enterprise bargaining system, its severe constraints on union membership and activity and its network of fraying statutory protections) is in need of fundamental and multidimensional change,” Stanford concludes.

Dr. Stanford’s review article, “A Turning Point for Labour Market Policy in Australia,” appears in Economic and Labour Relations Review, a peer-reviewed journal based at UNSW. Free public access to the article has been provided by the journal for a limited time: please visit this site to see the full article.

Stanford’s review was also reported in a feature article by The Saturday Paper‘s Mike Seccombe on the important role that wages and workplace issues will play in the coming federal election campaign.

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