We know the devastation unemployment causes a person, a family, a community and the nation. The economic and social crisis facing our country is severe, and the impact will not be shared fairly.
Joblessness hasn't been worse in our lifetimes. The shocking TV footage we saw as the pandemic hit of long queues outside Centrelink offices is a defining image of the crisis.
We have had the worst news on jobs we've had since the Great Depression of the 1930s. Underemployment reached the highest level on record. Overall, one worker in five either lost their jobs or lost hours during just a month. Women, the young and part time workers have borne the brunt of the crisis.
This crisis has also shone a light on low pay and insecure work.
The incidence of insecure work in Australia is alarming. The fact that our national government and some employer groups seek to deny this reality and refuse to support reforms to better protect workers in insecure non-standard employment is a disgrace.
Many from conservative quarters like to claim that casual work is the only form of ‘nonstandard forms of employment’. Casual jobs are definitely insecure, and there are far too many casual jobs in Australia with roughly one in every four people employed on a casual basis. However, employers have discovered many other ways to shift the risk and move workers from secure to insecure forms of employment.
These strategies include: using labour hire companies to create triangular employment relationships; sacking people in standard employment and rehiring the same workers to do exactly the same job but calling them “independent contractors” to lower their labour costs; using multiple consecutive short term contracts to avoid workers receiving the benefits that only apply to those in full-time permanent positions; replacing standard full-time workers with part-timers who face variable hours from week to week and who cannot get as many hours work as they would like; exploiting temporary visa holders through the power of controlling their passport as well as their employment; gig workers whose work, place of work, length and time of work are all varied outside their control while being forced to bid against each other for jobs without any protection, are all in non-standard forms of employment and face high levels of insecurity.
These jobs often involve working hours that are excessive to earn a very low wage (and usually involve working hours that are not friendly to a family, social or community life). The remuneration for non-standard, precarious or insecure work is usually insufficient to provide an individual or a family with a living wage and for many the weekly income can fall to zero without warning, merely because the boss decides that you are not needed for the next few days.
Employment conditions that were considered standard for much of the last century, like paid holidays and sick leave, are often not available to those in insecure employment. Importantly, most insecure workers have no, or very limited, employment protection and they normally find it very difficult to enforce their fundamental rights to freedom of association to join a union, to organise and to participate in collective bargaining. They sit in a twilight zone outside of the protections of an industrial relations system designed on the foundations of secure, permanent, full time employment.
Just because not every person in a non-standard working relationship is being exploited is no excuse to ignore the fundamental problems facing the vast majority of insecure workers. We should not design public policy to suit a small elite. It has never been appropriate to design national labour laws and labour market institutions based on the working conditions that prevail for the highest paid workers. On the contrary, our laws and institutions should be designed to protect everyone, especially those most vulnerable to exploitation. The basic premise of labour law is that a power imbalance exists between the individual worker and the employer. That imbalance is particularly pronounced for the vast majority of insecure workers.
Our labour laws, and labour market institutions, should be reformed to assist these workers who face a very dramatic power deficit in their employment relationship. They must also change to end the sham nature of many forms of insecure work and extend rights to workers not just those narrowly defined as employees.
Economic risk has been transferred to the workers
The dramatic expansion of insecure work in Australia in recent decades is the result of a business model that has shifted economic risks from the employer to the worker. Entrepreneurs in Australia like to brag that they are the risk takers on the cutting edge of the competitive marketplace. They claim that they deserve high profits and incomes because of this risk-taking activity. The reality is far different. When Australia is hit by an external shock and an economic crisis or domestic demand diminishes, like a pandemic, it is labour, not capital, that absorbs most of the pain. Because of the very high proportion of insecure jobs, Australian employers can rapidly and substantially reduce their number of employees and labour costs in a downturn. This was not the case when the vast majority of workers were in permanent, full-time jobs with adequate notice about termination and redundancy packages.
In recent times economic risk has been transferred to the workers but the financial rewards that flow in the good times has not. Despite provisions like the so-called casual loading, average hourly earnings in most non-standard jobs are below total average hourly earnings, and the labour share of income has undergone a steep decline. The declining wage share in national income is a result of both stagnant real wages and the expansion in non-standard employment.
The balance between risk and reward in the Australian labour market has shifted significantly in favour of the small elite. Workers absorb most of the risks and the bosses take all the rewards. This is a major factor behind the great divide in our nation. This business model thrives because public policy supports this approach.
Conservative voices often argue that Australia needs even more labour market flexibility to compete in global markets and to promote growth. This is economic nonsense. Every economy needs to balance labour market flexibility and security. All societies need to balance risk and reward. But public policy in Australia over the last 30 years has gone too far in promoting downward wage flexibility and flexible forms of work.
The neoliberal philosophy that has guided changes in our industrial relations system over the last 30 years has contributed to the overall expansion in insecure work and the emergence of new categories of non-standard work. This in turn has resulted in 8 years of stagnant wages at a time of economic growth and has been a major factor contributing to growing income inequality and social problems. It is also a fundamental factor explaining why large sections of the population are disillusioned with our political process and many of our public institutions. Curtailing the spread of insecure employment and improving the protection, pay and conditions available to workers in insecure jobs must be a priority.
The coronavirus crisis exposed fault-lines in Australia’s economy, labour market and OHS system. It has plunged millions of workers into unemployment or job insecurity and has hit some of the most disadvantaged workers the hardest. We needed a response to the crisis that addressed the direct impacts of the virus, but which also acknowledged and addressed the pre-existing weaknesses in our economy and society.
This is not the response we received. Instead we saw the gaps left in JobKeeper through which thousands of workers fell, the lack of response to the gendered nature of the impact of the crisis, with women disproportionately losing job and hours compared to men, the lack of paid sick leave and dangerous gaps in our workplace health and safety measures.
We have the opportunity to address these issues not with a return to pre-COVID trickle-down thinking, but with an ambitious, aggressive, government-led effort to rebuild the economy and put Australians back to work in secure jobs.
During this crisis working people kept our economy going, many by taking risks to their own personal safety. We must recognise the contribution of our unsung heroes, like our cleaners, supermarket workers, delivery workers and our health and aged care workers. To do this we need to create not only more jobs but a more secure world of work. We owe them this much.
Michele O’Neil is the President of the Australian Council of Trade Unions.