My Blog

Blog

  • Wrecking superannuation, not protecting women, is the government’s priority

    Wrecking superannuation, not protecting women, is the government’s priority

    by Alison Pennington in The New Daily

    Alison Pennington

    Senior Economist

    Share

    Originally published in The New Daily on March 20, 2021

    It doesn’t matter what the crisis, when it comes to the Morrison government the message is clear: you’re on your own.

    Women deserve so much more than what Jane Hume is proposing, writes Alison Pennington. Photo: AAP

    It doesn’t matter what the crisis, when it comes to the Morrison government the message is clear: you’re on your own.

    As women across Australia lead historic mobilisations demanding government action on gendered violence week, the federal government encouraged women facing domestic abuse to raid their own superannuation accounts.

    Calling superannuation withdrawal measures of up to $10,000 “an important last resort lifeline” for women experiencing domestic violence, Minister for Superannuation, Financial Services and the Digital Economy Jane Hume later announced the policy would be reviewed following concerns from frontline workers about victim coercion.

    Minister Hume now proposes to strengthen the “integrity” of the scheme with safeguards protecting the free withdrawal of funds. But additional steps for accessing women’s retirement funds do not change the policy’s message: survivors of abuse must fund their own crisis supports. All the while abusers roam free – an addition of intolerable insult to injury.

    Safeguards may stop abusive partners forcing women to raid their retirement savings, but it’s not stopping the federal government. The early-release scheme is entirely consistent with the government’s clear established priorities: dismantling the superannuation system – rain, hail or shine.

    Women marching for economic security and safety are not just ignored by the government. The Coalition’s anti-superannuation crusade to transform the system into an emergency personal bank account actively exploits women’s heightened COVID-era economic vulnerability.

    Women worse off since COVID

    In the initial COVID shutdowns, women experienced greater losses of jobs and hours. Against this backdrop of women’s desperation, the federal government introduced the superannuation early release scheme. Significantly, this was introduced two weeks before the introduction of the Coronavirus Supplement and the JobKeeper wage subsidy.

    Between April and December 2020, 1.5 million women drew down their super, one-quarter of the entire female workforce. $14.9 billion was stripped from women’s already meagre retirement savings. Some 345,000 women completely emptied their accounts. Many more women aged under 20, and also those aged 36-55 (prime working years pre-retirement), withdrew from their superannuation compared to men.

    In 2018, the Coalition announced domestic violence would be added to the list of early release “compassionate grounds”. Frontline domestic violence services voiced concern back then too. Now, pressured by intensifying calls for a proactive government addressing gendered violence, the Coalition suggests “safeguards”.

    The federal government acknowledged heightened gendered violence risks during COVID. But it has still failed to give sufficient funding to the domestic violence sector, lift critical income supports for vulnerable women fleeing abuse, or introduce paid domestic violence leave into minimum labour laws. In fact, $1 million was cut from anti-domestic violence education programs in schools in the 2020 October Budget.

    Early release scheme exacerbates disadvantage

    Women already face systematic disadvantage in the superannuation system and have much lower retirement incomes: they retire with barely half the retirement savings of men. There urgently needs to be targeted reforms to prevent labour market inequalities that reduce women’s career earnings from being baked into the superannuation system as well.

    Abolishing the $450 per month minimum threshold, closing the ‘motherhood gap’ by making super payable for all paid and unpaid care-related absences, and proceeding with the legislated increase in the superannuation guarantee (to 12 per cent) are all important to boosting women’s economic security and safety.

    In the absence of real action on gendered workplace and domestic violence, the government’s superannuation early release scheme for domestic violence victims only exacerbates women’s economic insecurity.

    Women desperate for incomes to survive are more reliant on abusive partners and low-wage casual jobs, more helpless to the threat of ‘handsy’ bosses and colleagues, and below-poverty welfare payments in the future. This latest policy only increases the risks of gendered violence over women’s lifetimes.

    For women experiencing job loss, financial hardship or domestic violence, the message from the federal government is one we are getting sick of hearing: in a crisis, you’re on your own.

    Australian women deserve so much more.


    You might also like

  • Briefing Paper: Women’s Casual Job Surge Widens Gender Pay Gap

    Gender at Work

    Briefing Paper: Women’s Casual Job Surge Widens Gender Pay Gap

    by Alison Pennington

    Author

    Alison Pennington

    Senior Economist

    Media release



    Casual Job Surge Widens Gender Pay Gap

    This briefing note presents data on the gendered composition of the employment recovery since May.

    It shows women’s jobs returned on a more part-time and casualised basis than for men, and that the influx of women’s lower-earning jobs widened the gender pay gap between May and November 2020.

    While women were more likely to lose these same jobs early in the COVID pandemic (and so the return of these jobs is predictable), these statistics demonstrate how the gender pay gap worsens with increases in part-time and casual jobs.

    Finally, the paper describes three major existing and proposed government policies that are likely to widen pay inequality in 2021.



    Full report

    Share

  • Casual Job Surge Widens Gender Pay Gap

    Casual Job Surge Widens Gender Pay Gap

    Share

    New research, released for International Women’s Day (8 March 2021), shows Australia’s recovery from the pandemic recession has widened the gender pay gap, as women’s jobs returned on a more part-time and casualised basis than for men.

    The report, by the Centre for Future Work, warns that Australia’s gender pay gap could deteriorate even further in the wake of policies proposed by the Government for 2021: including the further expansion of casual work and reduced pay for part-time workers, tabled in the omnibus industrial relations bill; public sector pay caps for both federal and state employees; and a high-cost, inaccessible childcare system.

    Key findings:

    • Women suffered disproportionate job losses when the COVID pandemic hit, and as the economy recovers are returning to jobs that are relatively more insecure.
      • Employment for women declined almost 8% between February and May 2020—over 2 percentage points worse than for men.
      • Women’s employment is still 0.9% lower than in January last year (around 53,000 less jobs), while male employment went up over that same period (by an additional 7,000 jobs).
      • Job-creation since May (the worst month of the COVID recession) has been heavily concentrated in casual and part-time jobs. From May through November, casual jobs made up over 60% of new jobs –and women filled 62% of those casual roles.
      • The disproportionate concentration of women in newly-created casual and part-time jobs is largely responsible for a significant widening of the gender pay gap after May.
    • Measuring the gender pay gap using total average earnings data (including both full-time and part-time workers, and bonuses and overtime as well as ordinary time wages) indicates that the gender pay gap is 31% across all jobs. That is a more dire, but more accurate, measure of the pay gap than other measures which include only full-time jobs.
    • Three major existing and proposed government policies could further widen pay inequality in 2021:
      • The further expansion of casual work and reduced pay for part-time workers, tabled in the omnibus industrial relations bill.
      • Public sector pay caps for both federal and state employees.
      • A high-cost, inaccessible childcare system.

    “The gendered nature of the pandemic recession on Australia’s labour market has markedly worsened pay inequality,” said Alison Pennington, senior economist at the Centre for Future Work.

    “Women lost jobs at a greater rate than men when the pandemic hit, and as the economy has recovered, are returning to fewer jobs offered on a more casualised basis. The gendered employment recovery is disproportionately leaving women with less hours, security and pay than men—a clear example of why a simple post-COVID “snap back” was never adequate for women.

    “Women have been bearing the brunt of the COVID recession while governments have targeted stimulus spending in bloke-heavy industries, neglecting investment in industries that support women’s employment, including healthcare, education and social services. To stop further deterioration in pay inequality, targeted efforts to lift women’s work and earning opportunities is critical.

    “Focused investment in women’s job creation, free childcare, and wage-boosting industrial relations policies are all within reach of governments at both federal and state levels.”


    Related research



    Briefing Paper: Women’s Casual Job Surge Widens Gender Pay Gap



    Full report

  • Business Council of Australia Research Confirms Centre for Future Work Research

    Business Council of Australia Research Confirms Centre for Future Work Research

    Share

    The Business Council of Australia (BCA) has today released a report which confirms trends described in earlier research by the Australia Institute’s Centre for Future Work.

    However, the BCA’s expressed concern for ‘the future of bargaining’ contradicts its support for the Government’s omnibus bill which will further undermine genuine bargaining and suppress already record-low wage growth.

    “The Business Council of Australia celebrates the benefits of enterprise agreement (EA) coverage by comparing higher average wage outcomes obtained under EAs with other pay-setting methods. Ironically, this endorsement is offered in their support for the Government’s omnibus IR Bill which will result in an enterprise bargaining system involving less union representation and reduced scrutiny of sub-par EAs by the regulator,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.

    “However, empirical data proves union representation is essential to achieving higher wage gains in EAs – the very advantage that the Business Council of Australia extolls.

    “By weakening the ‘better off overall test’ (BOOT), watering down scrutiny and approval processes, and introducing 21-day approval deadlines, the government’s IR Bill will accelerate growth in non-union EAs. For the last 10 years, non-union EAs have delivered lower wage increases than union-covered EAs. Alarmingly, the majority of non-union EAs have not specified any wage increases at all.

    “These sub-par EAs are what the business lobby want more of, but they will not ‘save’ enterprise bargaining. More non-union EAs will come at the expense of genuine collective bargaining, and would produce a decline in average wage increases for EA-covered workers.

    “In fact, the BCA’s proposals would take the “bargaining” out of enterprise bargaining, and wage increases out of enterprise agreements.

    “Do not be fooled by business lobbyist ‘complexity’ claims. The collapse of enterprise bargaining in the private sector is due to long-term structural factors including de-unionisation, employer resistance to genuine bargaining, full legal protection for free-riding, and failure of the Fair Work Act to support genuine bargaining in EA formation.

    “The current EA system has produced a long-term decline in independent employee representation, especially in the private sector.

    “Rebuilding collective bargaining and arresting wage stagnation will require a very different direction in reforming Australia’s IR laws, including the phase-out of non-union EAs, genuine review and approval processes, and multi-employer and sectoral bargaining.”

    Key findings from Centre for Future Work research:


    Related research



    Collective Bargaining “Reform”



    Full report



    On the Brink



    Full report



    How Non-Union Agreements Suppress Wage Growth – And Why the Omnibus Bill Will Lead to More of Them



    Full report

  • Submission to Senate Inquiry into the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020

    Insecure & Precarious Work

    Submission to Senate Inquiry into the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020

    by Alison Pennington and Jim Stanford

    Authors

    Alison Pennington

    Senior Economist

    Jim Stanford

    In December 2020, the Senate of Australia launched an important inquiry into the federal government’s proposed Fair Work Amendment Bill.

    Core features of the legislation include clarifying and expanding employer power to hire workers on a casual basis, obtain greater flexibility in the use of permanent part-time workers (adjusting hours up or down without penalty, much like casual workers), and exercise greater unilateral wage-fixing influence in enterprise agreement (EA)-making.

    The Centre for Future Work were glad to make a submission to this inquiry. The submission assesses major components of the legislation, and finds measures proposed will result in the expansion of employer power to use insecure labour and low-wage enterprise agreements, placing further downward pressure on already record-low wages.

    Alison Pennington presented evidence in-person to the Senate Education and Employment Legislation Committee in Adelaide on February 10th. A transcript of her testimony is attached below.

    Read the Centre for Future Work’s opening statement to the Senate Inquiry.

    The Fair Work Amendment Bill is introduced in a fragile moment in Australia’s history, with wages decelerating to the slowest sustained pace since the Depression – growing by less than 2% per year since 2015, and now at an utter standstill: growing just 0.1 per cent in the September quarter.

    In our judgment, several features of this legislation will enhance the power of employers to hire workers on a just-in-time basis, suppress wages, and undermine terms and conditions. Key measures proposed include:

    • Allowing employers to hire workers on a casual basis in virtually any position ‘deemed’ to be casual, with weak and inaccessible permanency conversion rights enabling long-term casual labour use.
    • Reduction in permanent part-time loadings and hours security, allowing employers to treat permanent workers as if they were casual (with the power to adjust hours up or down without penalty).
    • Exempting enterprise agreements from the ‘Better Off Overall Test’ (BOOT) allowing them to contravene Modern Award standards. This will increase below-Award agreement-making and “repurpose” enterprise bargaining into a mechanism for lowering wages and standards – rather than raising them.
    • Other measures aimed at the Fair Work Commission would accelerate the approval of low-quality enterprise agreements: including 21-day approval timelines, weakening of employer requirements to demonstrate that their staff have genuinely agreed to the EA, and restrictions on the participation of unions in the review process.

    Together, these changes would constitute a significant weakening of institutional supports for improving wages and working conditions. This is the opposite outcome to the stronger wage growth many economists (including Governor of the RBA Dr Phillip Lowe) agree is desperately needed to support Australia’s more sustainable and inclusive recovery.

    You can download the Centre for Future Work’s full submission to the Senate Inquiry below, authored by Senior Economist Alison Pennington, and Director and Economist Dr Jim Stanford.



    Full submission



    Transcript

    Share

  • Omnibus IR Bill will Further Reduce Wage Growth

    Omnibus IR Bill will Further Reduce Wage Growth

    Share

    New research by the Australia Institute’s Centre for Future Work shows the Federal Government’s omnibus industrial relations bill will lead to a significant increase in employer-designed enterprise agreements (EA) that reduce workers’ pay and conditions, rather than improve them—signalling a return to the WorkChoices pattern of EA-making and putting further downward pressure on Australia’s already record-low wages growth.

    The bill proposes sweeping changes to labour laws which would see an acceleration of EAs written unilaterally by employers, without negotiation with a union. EAs will be exempt from the current Better Off Overall Test, subject to less scrutiny at the Fair Work Commission, and employers will have less stringent tests to ensure their proposed EAs are genuinely approved by their affected workers.

    Key findings:

    • Wage increases under non-union EAs are consistently and significantly lower than in union EAs; on average one-percentage-point lower since 2010.
    • The majority of non-union EAs approved between 2006 and 2019 did not specify any wage increases at all, instead linking wage increases to non-legislated measures like CPI, minimum wage decisions by the Fair Work Commission, or employer discretion.
    • In addition to lower (or no) wage increases, the average duration of a non-union EA is longer than for union EAs, locking in inferior wage outcomes for longer periods of time.
    • The exemption for EAs to meet the Better Off Overall Test (BOOT), which shows whether employees would be better off under a proposed EA than under the relevant Award, is supposed to last for two years. But in reality, the terms of EAs negotiated under the BOOT exemption could stay in effect for many years, unless they are renegotiated or terminated.
    • While the overall share of workers covered by EAs will likely increase if these measures pass, a higher proportion of EAs will consist of sub-standard, lower-wage deals, which will see Australia’s current record-low wage growth get worse, not better.

    “When the COVID-19 pandemic hit, wage growth slowed virtually to zero. The omnibus bill will lock in that wage stagnation, by further weakening the already-constrained ability of workers to negotiate genuine collective agreements,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.

    “Australia’s experience under WorkChoices, when similar policies were implemented, demonstrates that if the proposed bill is introduced both the number of non-union EAs will increase, and the share of EAs without any specified wage increases will grow.

    “Non-union EAs deliver significantly worse wage outcomes that union-EAs, even with the BOOT in place. Removing the BOOT will open the floodgates for employers to rush the approval of EAs that undercut Award wages, further suppressing wages growth in 2021 and beyond.

    “Any increase in the number of lower-wage, non-union EAs will reduce rather than lift the wages and conditions delivered through EAs overall, leaving Australian workers worse-off.”


    Related research



    How Non-Union Agreements Suppress Wage Growth – And Why the Omnibus Bill Will Lead to More of Them



    Full report

  • How Non-Union Agreements Suppress Wage Growth – And Why the Omnibus Bill Will Lead to More of Them

    Unions & Collective Bargaining

    How Non-Union Agreements Suppress Wage Growth – And Why the Omnibus Bill Will Lead to More of Them

    by Alison Pennington

    Author

    Alison Pennington

    Senior Economist

    Media releases



    Business Council of Australia Research Confirms Centre for Future Work Research



    Omnibus IR Bill will Further Reduce Wage Growth

    The federal government’s omnibus Industrial Relations bill proposes sweeping changes to labour laws which will generally enhance the power of employers to hire workers on a just-in-time basis, and will put further downward pressure on Australian wages (already growing at a record-low rate). One outcome of the bill will be an acceleration of enterprise agreements (EAs) written unilaterally by employers, without negotiation with any union. These non-union EAs will be favoured for several reasons if the omnibus bill is passed: EAs will be exempted from the current Better Off Overall Test, employer-designed EAs will be subject to less scrutiny at the Fair Work Commission, and employers will have less stringent tests to ensure their proposed EAs are genuinely approved by affected workers. All of these changes will lead to a significant increase in employer-designed EAs that reduce compensation and conditions, rather than improving them – signalling a return to the WorkChoices pattern of EA-making.

    In a new report, Centre for Future Work Senior Economist Alison Pennington assesses the major ways in which the IR bill will accelerate non-union EA-making, and considers three specific ways this in turn will undermine wage growth in Australia compared with existing collective bargaining laws.

    Main findings of the report include:

    • The omnibus bill’s proposals to exempt agreements from the Better Off Overall Test (BOOT), reduce scrutiny by the Fair Work Commission (FWC) and weaken employer obligations to demonstrate that their staff have genuinely agreed to the EA will increase the number of non-union employer-designed EAs.
    • Wage increases under non-union EAs are consistently and significantly lower than in union EAs – on average 1-percentage-point lower than for union-covered EAs since 2010.
    • Alarmingly, the majority of non-union EAs approved 2006-19 did not specify any wage increases at all, instead linking wage increases to non-legislated measures like CPI, minimum wage decisions by the FWC, or entirely to employer discretion.
    • In addition to lower (or no) wage increases, the average duration of non-union EAs is longer than for union EAs, locking in their inferior wage outcomes for longer periods of time.
    • Australia’s experience under WorkChoices when similar policies were implemented demonstrates that if the proposed measures are introduced, both the number of non-union EAs will increase, and the share of EAs without any specified wage increases will grow.
    • Since the majority (66%) of the current EA stock consists of higher-wage union agreements, any increase in the number of lower-wage, non-union EAs would increase their proportion within the total EA stock, reducing rather than lifting wages and conditions delivered through EAs overall.
    • Importantly, non-union EAs delivered significantly worse wages outcomes even while the BOOT was in place. The government’s proposal to exempt EAs from the BOOT will open the floodgates for employers to rush the approval of EAs that undercut Award wages, further suppressing wages growth in 2021 and beyond.
    • The BOOT exemption is proposed for a period of two years, but in reality, the terms of EAs negotiated under the BOOT exemption could stay in effect for many years afterward. This is because EAs continue to apply after their formal expiry date unless they are renegotiated or terminated.
    • The overall share of workers covered by EAs will likely increase if the measures pass. But since more of those EAs will consist of sub-standard, lower-wage deals, Australia’s current record-low wage growth will get worse, not better.



    Full report

    Share

  • Migrant Workers Abandoned in the COVID Recovery

    Migrant Workers Abandoned in the COVID Recovery

    by Alison Pennington

    Alison Pennington

    Senior Economist

    Share

    COVID continues to sweep Europe and the US, while Australia celebrates near-elimination of community transmission. But Australia’s public health success has not come without significant economic and social hardship for large sections of our community – especially migrant workers. Thousands of migrant workers were pulled off the job to stop the spread of COVID-19, and excluded from key government income support programs including JobSeeker and JobKeeper. Temporary migrant workers are still left without access to Medicare.

    In this short, accessible commentary, Senior Economist Alison Pennington outlines how the pandemic, the resulting recession and government COVID-era policies have increased risks to migrant workers’ financial security, and health and safety. Building more secure, inclusive labour markets can reduce risks that future major events don’t hit the most vulnerable hardest.

    This commentary was prepared for presentation to the Migrant Workers Centre Conference, November 2020.

    Migrant Workers & The COVID-19 Recession

    by Alison Pennington, Senior Economist at Centre for Future Work

    COVID infections continue to sweep Europe and the US while Australia celebrates multiple days without any cases of community transmission. But Australia’s public health success has not come without significant economic and social hardship for large sections of our community – especially migrant workers. Thousands of migrant workers were pulled off the job to stop the spread of COVID-19, and excluded from key government income support programs including JobSeeker and JobKeeper. Temporary migrant workers are still left without access to Medicare.

    As the economy slowly recovers from recession, migrant workers will face even greater hardship in accessing decent jobs and incomes. The expiration of temporary work visas without supports to reconnect with new employers, and in jobs that pay enough, will expose migrant workers to more intense exploitation.

    The federal government’s response to the unprecedented COVID-19 economic crisis has included big spending on tax cuts, subsidies and other business concessions as part of its “business-led recovery”. But there are many problems with how the government thinks about the economy, that will mean the economic crisis will be longer and more painful than it needs to be.

    The pandemic has left deep cuts in the economy: two million people (15% of labour force) are either unemployed, working far fewer hours than normal, or have left the labour market all together since the March lockdowns; consumer spending has not fully recovered after lockdown restrictions were lifted and people prefer to save in preparation for harder times. Companies are focused on recovering or maintaining profits, cutting investments in their businesses, and cutting spending on employment and wages. Private investments have been decreasing for years and will not miraculously rebound during a recession. Trusting the private sector to lead our post-COVID economic recovery therefore is like hoping for a miracle.

    Income tax cuts are mainly symbolic and do not have real and lasting impacts on boosting spending in the economy. In fact, normal pay rises are far more effective than tax cuts because the effect of wage growth is permanent and cumulative. The announced tax cuts are also unfairly designed to benefit high-income earners. 88 per cent of the combined permanent benefit of the tax cuts will go to highest-fifth of income earners whereas low- and middle-income earners will get only a one-time rebate of $1,080 at the next tax return.

    Wage growth is expected to stay at 1.25 per cent in 2021 – enough only to match the slow rise in consumer prices. But a higher unemployment rate and continued increase in part-time and casual jobs will cut household incomes even more. If the government adopted measures to strengthen wages including higher minimum wages and stronger collective bargaining rights, our recovery would be on a better track.

    Youth, women, migrant workers and long-term unemployed are in most need of targeted job-creation policies. But the federal government has presented no plan to create jobs for the millions of unemployed, underemployed and disenfranchised who want and need paid work. The JobMaker program provides a subsidy for 12 months to employers creating new jobs for young workers on unemployment payments. It is a short-sighted initiative that will not reach its intended claim of creating 450,000 jobs (Treasury estimate now 45,000). There is no guarantee young workers will maintain employment once the government stops paying for the subsidy.  Without job protections, the program will encourage the “churning” of vulnerable young workers in low-wage, insecure jobs. It could also displace existing workers and discourage the hiring of others. Migrant workers have already experienced mass redundancies when employers chose to engage workers who qualified for the JobKeeper subsidy. Migrant worker displacement may occur under JobMaker.

    Despite Australia’s macroeconomic weakness, the government intends to decrease spending by billions in cuts to the JobKeeper and Coronavirus Supplement payments in March 2021. The impacts on the jobs and incomes of low and middle-income workers will be disastrous. The real way to overcome the recession will be to restore the capacity of people to work, earn and be healthy, engaged members of a more inclusive Australian economy. This can be achieved only when the government commits to a long-term, ambitious vision for economic and social change, backed by substantial and sustained public spending. This vision should create more secure jobs, invest in climate-friendly industries, and strengthen and expand our public services like healthcare, education and skills.

    Rather than wait for private sector investment, the federal and state governments can expand direct public sector employment now. They can also ensure all people residing in Australia are protected from poverty and insecurity now. Urgent measures should be taken immediately to address the pronounced risks to migrant workers’ financial security, and health and safety experienced during this crisis:

    • Expand JobSeeker and the Coronavirus Supplement coverage to excluded migrant workers. Reverse the punitive and economically counterintuitive cuts to the Coronavirus Supplement, and permanently restore the $550 per fortnight rate.
    • Expand JobKeeper coverage to all workers, and end the two-tiered wage subsidy scheme, returning the original $1,500 flat payment rate permanently.
    • Create a paid sick leave scheme available to all workers, regardless of their work status.

    The pandemic has shone a light on the growing scourge of insecure work. Around half of all employment in Australia has one or more dimensions of precarity including casual, temporary, part-time insufficient-hours work, and self-employment. Precarious work contributed to the community spread of disease, such as in the private aged care system where widespread practices of multiple jobholding led to virus transmission between facilities.

    We have worked together to eradicate COVID-19, and we can work together to eradicate insecure work. Working to build more secure labour markets for all is about reducing risks that major events don’t hit the most vulnerable hardest. Job creating investment, quality public education and skills systems, income supports for all, and extending minimum labour standards like Award wages and collective bargaining are critical to an inclusive post-COVID recovery. And by strengthening the collective efforts of workers to take action in their unions, we can put good jobs and incomes in the driving seat of Australia’s economic recovery.


    You might also like

    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages

  • Yes, lockdowns mean lost jobs. But data shows that not locking down causes much more economic damage

    Yes, lockdowns mean lost jobs. But data shows that not locking down causes much more economic damage

    by Jim Stanford in Toronto Star

    Jim Stanford

    Share

    Originally published in Toronto Star on January 16, 2021

    With new stay-at-home orders covering many parts of the province, Ontarians are settling in for a month (at least) of daunting isolation. Restrictions are also being tightened in other provinces to slow the spread of COVID-19, until vaccines can turn the tide of the pandemic.

    Despite accelerating infection and overflowing hospitals, many oppose the new restrictions on grounds that their economic costs are just too high. Business lobbyists grumble that health rules on retailers, airlines, cinemas, ski resorts, gyms, and more are onerous and unfair. Each sector invokes comparisons to others which supposedly get off easier. The common thread in their resistance is an assumption that strong health restrictions are deeply damaging the economy.

    As the pandemic rolls on, however, it is increasingly clear that the best way to protect the economy is to stop COVID. Yes: lockdowns reduce economic activity and employment. But not locking down, letting the virus run rampant, causes more economic damage — on top of the toll in lives and suffering. Anyone concerned about the economy should be pleading for fast, powerful lockdowns, not demanding a return to business-as-usual.

    The correlation between controlling contagion and economic recovery is clear across Canadian provinces: those with fewer COVID cases have achieved the strongest employment results since the pandemic hit. It’s not often that New Brunswick leads the nation in employment growth — but it did last year. Its near-elimination of the virus was the obvious reason.

    In this context, the protestations of premiers Doug Ford and Jason Kenney that fighting COVID must be “balanced” against the interests of business were always self-defeating. Even if they were motivated solely by desire to protect business, their top priority should have been stopping COVID. The faster and harder that battle was waged, the better business fared.

    The correlation between COVID suppression and economic performance is also obvious in international data. Several countries moved fast with severe but temporary restrictions on mobility and business; and they are now harvesting the fruits of their foresight. COVID-slaying nations like Australia, China, New Zealand, South Korea and Taiwan are already enjoying powerful and sustained economic recoveries. Their economies (forecast to grow by five to eight per cent this year) are racing far ahead of those still lurching from one wave of infection to the next.

    No one escaped the economic fallout of the pandemic. But after powerful action to suppress contagion, these countries are now recovering strongly and predictably. Elsewhere, the economic outlook is far less certain. In Canada, for example, our hopeful summertime recovery is already disintegrating: employment is now falling again. America, Britain, and other places where COVID suppression failed miserably are faring even worse.

    A particularly powerful illustration of the link between public health and economic recovery is provided by the experience of Victoria, the second largest state in Australia. After initial success limiting COVID-19’s spread, a second wave took hold in Melbourne (Victoria’s capital), infecting 600 people per day by early August. The state government ordered a strict lockdown, more severe than anything yet experienced in Canada: overnight curfew, closure of most workplaces, and strict bans on social gatherings and travel.

    The government was pilloried for its response — facing sustained attacks from its federal counterpart, business groups, and conservative commentators, all lamenting Victoria’s descent into “dictatorship.” Yet after 111 long days, Victoria achieved something almost unheard of: mass community spread was stopped, and new cases fell to zero by late October. Now the state economy is blossoming: employment rebounded 2.2 per cent in November alone, retail sales grew 22 per cent the same month, and Victorians are flocking back to restaurants, pubs, and malls. All those CEOs whining about Canada’s late and half-hearted restrictions must be drooling with envy.

    Leaders like Kenney and Ford were unduly influenced by short-sighted concern with business profits. Their reticence has created needless harm, for both public health and the economy. If we’d moved faster and more powerfully to limit contagion, business would already be better off.

    The economy is made up of human beings who work, produce, and consume. There’s no tradeoff between the economy and the health of those same human beings. The sooner we recognize they are one and the same, the sooner we can finally get serious about winning this battle.

    Jim Stanford, director of the Centre for Future Work in Vancouver, is a freelance contributing columnist for the Star. Follow him on Twitter: @jimbostanford


    You might also like

    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets. As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives. There is

    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

  • Pandemic Exacerbated Inequality, Insecurity in Australia’s Labour Market

    Pandemic Exacerbated Inequality, Insecurity in Australia’s Labour Market

    Share

    A year-end review of the dramatic changes in Australia’s labour market in 2020 has confirmed that the worst economic impacts of the Covid-19 pandemic were felt by Australians in relatively low-paid, insecure jobs.

    Key Findings:

    • Workers in casual jobs lost employment at a rate 8 times faster than those in permanent positions
    • Part-time workers suffered job losses 3 times worse than full-time workers
    • Young workers, women, and workers who do not work in offices also suffered disproportionate job losses during the initial shutdowns – and continue to experience much worse employment conditions
    • Worse yet, the report shows the rebound in employment that began in May has seen a historic surge in insecure jobs – which account for the vast majority of new jobs created since the economy began re-opening

    “It is painfully ironic that the worst impacts of the pandemic were felt by those who could least afford to lose their work and income,” said Dr Jim Stanford, Director of the Centre for Future Work, and co-author of the report.

    “Both on the way down, and on the way back up, this recession has reinforced the dominance of insecure work in Australia’s labour market.

    “Precarious work strategies explain why the effects of the pandemic were so painfully unequal, and this new surge in insecure work makes Australians even more vulnerable to such shocks in the future.

    “Covid-19 had a terrible impact on both the quantity and quality of work in 2020. Because Australia has been relatively successful in controlling the virus, the labour market could improve significantly in 2021, however, the rapid expansion of insecure work poses a major challenge to the stability and prosperity of Australian households,” Dr Stanford said.

    Other findings of the report include:

    • Since May, over 400,000 casual jobs have been created (2200 per day, on average), accounting for over 60% of all new waged positions since the recovery started. That is the largest surge in casual employment in Australia’s history – contradicting business and government claims that uncertainty about casual employment rules are holding back hiring.
    • Workers over 35 years of age have regained all of the jobs lost in the pandemic, and then some. All remaining job losses are concentrated among workers under 35.
    • Office-based occupations (professionals, clerical workers, and most managers) have also regained pre-pandemic employment levels. But other occupations (especially community and personal services, sales workers, and labourers) continue to suffer major employment losses.
    • New labour laws proposed by the Commonwealth government would accelerate the surge in insecure work: liberalising the use of casual labour by employers, and allowing them to treat permanent part-time workers more like casuals.

    Related research



    2020 Year-End Labour Market Review: Insecure Work and the Covid-19 Pandemic



    Full report