Raising the Bar: How Government Can Use its Economic Leverage to Lift Labour Standards Throughout the Economy

by Jim Stanford

For at least five years now, Australia’s labour market has demonstrated signs of a structural shift that has undermined traditional patterns of wage determination, and eroded the quality and security of work. The economic and social consequences of this sea change in the world of work are severe and far-reaching: flat real wages (the worst labour income growth since the Great Depression), a severing of the traditional relationship between wage and productivity growth, a steady expansion of insecure work in various forms, growing inequality in income distribution (both between factors and across households), and a precipitous decline in collective representation and enterprise bargaining (especially in the private sector). Governments tell Australians to simply be patient, and let “market forces” do their work; wages will pick up and economic benefits will soon “trickle down.” But there is no reason to expect these concerning labour market challenges to resolve themselves. Instead, the whole history of Australia’s economy reminds us that pro-active policy efforts are always necessary to broadly distribute the fruits of economic growth to workers and their families.

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