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Not enough work: how power keeps workers anxious and wages low

Barbara Pocock

The following article in The Conversation appeared in March 2019, well before the advent of the Covid-19 pandemic, however it draws attention to the growth in part-time employment and the stall in wages growth.

In March 2019, Australia’s unemployment rate had a “4” in front of it. The rate released in February came in at 4.9%. It was the first time the rate had begun with a four since the time of the Rudd and Gillard governments – when it dipped below 5% several times, and since the Howard and Rudd governments in the leadup the global financial crisis when it usually began with a four and at one point dipped to 3.9%.

It would have been good news were it not for another, almost as important, indicator – the underemployment rate.

Workers are underemployed when they are working fewer hours than they want to. They might be working part-time instead of full-time, or part-time for 10 hours a week instead of 20, or full-time at 35 hours instead of 40.

Over the previous five years the proportion of the workforce underemployed climbed from 7.2% to 8.1% while the unemployment rate climbed from 5.2%, then fell – hitting 4.9%.

The underemployed are disproportionately women (60%), and are concentrated in the retail, health care and hospitality industries. Their jobs are more likely to be insecure, with inadequate hours often accompanied by unpredictable or uncertain hours.

They are in industries that have seen growth in temporary migrant workers and the systematic underpayment of workers, reflecting changes in the temporary visa system as well as weakness- es in the enforcement of wage laws.

Wages are the other side of the bad news. No one who has made a regular appearance at the plethora of parliamentary inquiries that have accompanied the rewriting of Australia’s industrial relations system over the past 23 years would be surprised that wage growth is bumping along at historic lows.

The reworked industrial relations system, and the social, cultural, economic and labour market context in which it sits, has reshaped power at work. Wave after wave of change has had the end result of shifting power to employers.

It is that change in power that mainly explains the stalling of wages growth.

As 124 labour market experts said in their open letter in support of wages growth that recently appeared in Aust Fin Review, we see the longest sustain- ed rate of slow wage growth since the end of the Second World War.

It certainly isn’t the result of falling productivity, which has actually climbed 39% in the past two decades while real wages have climbed only 14%.

The feminisation of employment has also helped shift the power balance at work. Women’s share of the total work- force climbed from 43% to 47% between 1999 and 2019.

Research in many countries tells us that women are no less inclined to join a union and have no less an appetite to improve their working conditions than men. However, women’s caring responsibilities and the practical demands they face, along with the nature of the industries in which they work, often make it harder for them to bargain or to take industrial action.

Analysts focus on the causes of this historic wages stall. RBA Governors have cautioned about its consequences for the economy. But in thousands of households across Australia, a five-year stall in wages growth exacts a very high human cost. It particularly affects those already on low pay, for whom only a few dollars a week mean the difference between making rent, paying for school excursions or filling the fridge. ‘Frugal comfort’ of the kind promised by Justice

ABS wage price index

Higgins in 1906 (for full-time men), is a long way from the anxiety that flatlining wages mean for many Australians.



The Conversation, 22 March 2019

Barbara Pocock is an Emeritus Professor at the University of South Australia

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