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  • Four Views on Basic Income, Job Guarantees, and the Future of Work

    Macroeconomics

    Four Views on Basic Income, Job Guarantees, and the Future of Work

    by Frances Flanagan, Troy Henderson, Ben Spies-Butcher and Jim Stanford

    Authors

    Frances Flanagan

    Troy Henderson

    Ben Spies-Butcher

    Jim Stanford

    The unprecedented insecurity of work in Australia’s economy – with the labour market buffeted by technology, globalisation, and new digital business models – has sparked big thinking about policies for addressing this insecurity and enhancing the incomes and well-being of working people. Two ideas which have generated much discussion and debate are proposals for a basic income (through which all adults would receive an unconditional minimum level of income whether they were employed or not) and a job guarantee (whereby government would ensure that every willing worker could be employed in some job, such as public works or public services, thus eliminating involuntary unemployment).

    Progressives have campaigned for generations for stronger income security programs and for a commitment to full employment by government. So these ideas have a long pedigree. However, there is great discussion over both the implementation and cost of these proposals, and their broader (and perhaps unintended) economic and political consequences.

    To shed some additional, constructive perspective on these proposals, we are pleased to present four short commentaries on basic income, job guarantees, and the future of work by four leading Australian experts on the economics and politics of work.

    The four commentaries are posted below in alphabetical order of their authors:

    • Dr. Frances Flanagan, Research Director, United Voice: The Policy and Politics of Basic Income: A Few Concerns
    • Troy Henderson, Economist, Centre for Future Work: Situating Basic Income and a Job Guarantee in a Hierarchy of Pragmatic-Utopian Reform
    • Dr. Ben Spies-Butcher, Dept. of Sociology, Macquarie University: Basic Income as a Progressive Priority
    • Dr. Jim Stanford, Economist and Director, Centre for Future Work: Work, Technology, and Basic Income: Issues to Consider

    Three of the commentaries (by Flanagan, Henderson, and Spies-Butcher) were initially presented to the recent “Reboot the Future” conference in Sydney, hosted by Greens NSW Political Education Trust. The authors expanded and edited their remarks for the purposes of this symposium. We thank the organisers for their cooperation. The fourth commentary (by Stanford) arose from recent discussions within the Centre for Future Work’s voluntary Advisory Committee.  Together, we think these nuanced commentaries add valuable perspective to these important but complex policy debates.

    Our publication of these commentaries coincides with this week’s annual General Assembly of the Basic Income Earth Network (BIEN), being held this year at the University of Tampere in Finland.  In a personal capacity, Centre for Future Work economist Troy Henderson is presenting at the Assembly on his Ph.D. research regarding the fiscal and labour market impacts of basic income.

    We will continue to consider the advantages and disadvantages of both these important policy proposals in future research and commentary. We thank the authors for their contributions to this discussion, and welcome further feedback!



    Frances Flanagan



    Troy Henderson



    Ben Spies-Butcher



    Jim Stanford

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  • Exploring the Decline in the Labour Share of GDP

    Macroeconomics, Wages & Entitlements

    Exploring the Decline in the Labour Share of GDP

    by Frances Flanagan, Frank Stilwell, Jim Stanford, David Peetz, Margaret McKenzie and Shaun Wilson

    Authors

    Frances Flanagan

    Frank Stilwell

    Jim Stanford

    David Peetz

    Laurie Carmichael Distinguished Research Fellow

    Margaret McKenzie

    Shaun Wilson

    Media releases



    Workers’ Share of Economic Pie Shrinks Again



    Workers’ slice of Australian economic pie gets smaller

    The share of total economic output in Australia that is paid to workers (in the form of wages, salaries, and superannuation contributions) has been declining for decades. Workers produce more real output with each hour of labour (thanks to ongoing efficiency improvements and productivity growth), but growth in real wages has been much slower – and recently, real wages haven’t been growing at all. The result is that labour’s slice of the economic pie has been getting smaller. In fact, a recent Centre for Future Work report showed that in early 2017 the labour share of GDP hit its lowest level since the Australian Bureau of Statistics began collecting quarterly GDP data.

    To explore the causes and consequences of this decline in workers’ share of national income, the Centre for Future Work convened a special panel of experts at the Society for Heterodox Economists conference at UNSW in Sydney last December. The papers presented at that panel have been peer-reviewed and just published in the Journal of Australian Political Economy. We are very pleased to co-publish the 4 papers here.

    • In addition to further documenting the long erosion of workers’ share of Australian GDP, the symposium sheds additional light on the trend, including the following aspects:
    • The shifting distribution of income from labour to capital contributes to widening inequality in personal incomes (since financial wealth, and income from that wealth, is so tightly concentrated among the richest Australians).
    • The decline in the labour share in Australia has been among the worst third of all OECD economies; and some countries have experienced stable or even rising labour shares, proving this trend is neither universal nor inevitable.
    • The growing power of finance, and the financialisation of business practices even by non-financial firms, have been key factors in the relative fall of labour compensation.
    • New business models involving the fragmentation of work and the outsourcing of direct employment responsibilities by lead companies (what participating author David Peetz terms “not-there capitalism”) have also contributed to the trend.
    • Australia’s minimum wage once established a strong foundation for a healthy labour share of national income, but its influence has eroded over the last 30 years as minimum wages have failed to keep up with overall wage trends and productivity growth.
    • Despite the erosion of union density and collective bargaining, Australian unions still possess an impressive capacity to mobilise working people to demand a better share of the economic pie (including through the political process).

    The long decline in the labour share is a powerful, telling indicator of the regressive shifts in the power balances of Australian society over the last generation.  These articles help us understand what has happened – and how to achieve a better distribution of income between factors of production in the future.

    Links to the 4 articles, and a rich introduction to the symposium (by Dr. Frances Flanagan of United Voice and Prof. Frank Stilwell of the University of Sydney) are provided below. Please visit the Journal of Australian Political Economy to learn more about the symposium, and to subscribe.

    • Introduction: Frances Flanagan and Frank Stilwell.
    • The Declining Labour Share in Australia: Definition, Measurement, and International Comparisons: Jim Stanford (Director, Centre for Future Work)
    • The Labour Share, Power and Financialisation: David Peetz (Professor of Employment Relations, Griffith University)
    • The Erosion of Minimum Wage Policy in Australia and Labour’s Shrinking Share of Total Income: Margaret McKenzie (Economist, Australian Council of Trade Unions)
    • The Declining Labour Share and the Return of Democratic Class Conflict in Australia: Shaun Wilson (Associate Professor Sociology, Macquarie University)



    Frances Flanagan & Frank Stilwell



    Jim Stanford



    David Peetz



    Margaret McKenzie



    Shaun Wilson

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  • New Research Symposium on Work in the “Gig Economy”

    Gig Economy

    New Research Symposium on Work in the “Gig Economy”

    by Frances Flanagan, Andrew Stewart, Jim Stanford, Wayne Lewchuk and Kate Minter

    Authors

    Frances Flanagan

    Andrew Stewart

    Jim Stanford

    Wayne Lewchuk

    Kate Minter

    The informal work practices of the so-called “gig” economy are widening existing cracks in Australia’s system of labour regulations, and should be repaired through active measures to strengthen labour standards in digital businesses. That is the conclusion of newly-published research from a special symposium on “Work in the Gig Economy,” organised by the Centre for Future Work.

    The symposium includes contributions from four leading labour market scholars, first presented to a special seminar last year at the conference of the Society of Heterodox Economists in Sydney. The papers have now been published (after a peer-review process) in Economic and Labour Relations Review, an academic journal based at UNSW. The symposium includes research conducted by:

    • Prof. Andrew Stewart of the University of Adelaide
    • Dr. Jim Stanford of the Centre for Future Work at the Australia Institute
    • Prof. Wayne Lewchuk of McMaster University in Canada, and
    • Kate Minter, researcher at Unions NSW.

    The symposium also features an introductory essay by Frances Flanagan, Research Director at the United Voice trade union.

    While the gig economy is often portrayed as an exciting “new” innovation, the work practices embodied in digital platforms are long-standing, and have been utilised by employers for hundreds of years. Jim Stanford’s article describes these historical continuities – including reliance on home work, on-call labour, piece work compensation, and the use of labour intermediaries.  While the digital apps now used to coordinate this work are new, the core features of the precarious employment relationships created in digital businesses are not; regulators should learn from this history in their efforts to develop new tools for protecting labour standards in digital businesses.

    In their article, Prof. Andrew Stewart and Dr. Stanford highlight several broad options for regulatory reform to close the gaps in labour regulation that allow gig businesses to avoid traditional employment standards (like minimum wages). There is clear potential to more forcefully apply existing labour laws to gig businesses, using test cases and other efforts to clarify that workers in gig businesses should indeed be protected by minimum standards.  Clarifying and strengthening the definition of “employee” in existing labour law (so that gig workers are more clearly covered by those laws) would be another promising avenue.  Stewart and Stanford urge regulators to be “ambitious, creative, and eclectic” in their efforts to regulate work in the gig economy, to avoid negative social and economic consequences from the erosion of minimum labour benchmarks.

    Prof. Wayne Lewchuk shows that conventional labour market statistics understate the prevalence of gig work (and other forms of insecure employment), because merely categorising a job as either “permanent” or “temporary” does not capture the more complex forms of insecure work that are increasingly common in the labour market.  Lewchuk also documents the myriad of personal, financial, social, and health consequences of insecure jobs (including gg work).

    Finally, Kate Minter’s contribution to the symposium reviews one specific effort to negotiate the application of minimum labour standards within a digital platform business: namely, a process of negotiation between the odd-job platform Airtasker and the peak trade union body in NSW.  While the resulting agreement (under which Airtasker agreed to recommend minimum award wage rates as the basis for “costing” the jobs advertised on its platform) is not on its own sufficient to ensure minimum standards will be met, it represents a concrete case of how engagement by all stakeholders (including digital businesses, unions, advocates, and regulators) can build momentum for protecting basic standards in the gig economy.

    The final published versions of all articles in the symposium (including the introduction by Frances Flanagan) are available  through the Economic and Labour Relations Review’s website, or through your local library.  Links to pre-publication versions of each article are also provided below.

    • Introduction to the Symposium on Work in the Gig Economy, by Frances Flanagan.
    • The Resurgence of Gig Work: Historical and Theoretical Perspectives, by Jim Stanford:
    • Precarious Jobs: Where are They, and How do They Affect Well-Being?, by Wayne Lewchuk.
    • Regulating Work in the Gig Economy: What are the Options?, by Andrew Stewart and Jim Stanford:
    • Negotiating Labour Standards in the Gig Economy: Airtasker and Unions New South Wales, by Kate Minter:



    Introduction



    The Resurgence of Gig Work: Historical and Theoretical Perspectives



    Precarious Jobs: Where are They, and How do They Affect Well-Being?



    Regulating Work in the Gig Economy: What are the Options?



    Negotiating Labour Standards in the Gig Economy: Airtasker and Unions New South Wales

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