Wages not rising largely because of rising casual and insecure work

By Adam Carlton

Last week’s new ABS figures continue the gloomy outlook for the Australian economy, and especially for the prospects of an improvement in jobs and wages.

Wages continue to stagnate and the casualisation of work shows no sign of slowing down, while the number of secure full-time jobs continues to fall.

These two realities of stagnating wages and poor job prospects are interlocked. When many in the workforce are forced into insecure and poorly paid work, all wages are pressured downwards.

The final three months of last year saw a mere 2.2 percent increase in average wages, well below the prior average of 3 to 4 percent. And this growth is uneven, weighted towards healthcare, while industries in both the private and public sectors, fall way below the line.

The graph below shows that this is a long term trend.

The ABS figures suggest that 8.3 percent of the workforce is “underemployed.” This is not the same thing as casualised. It just marks the number identified as looking for more hours work. It does not consider the much bigger number in casual, part-time and those designated by employers as contractors, including labour hire workers. This takes it to somewhere near 40 percent of the workforce.

Even if it was just 8.3 percent, it would still be far too many.

Add to this a steadily increasing longer-term rate of unemployed. Underemployment is now officially sitting at 5.1 percent in of the workforce. Others suggest that the real figure is much more than this. What is important here, is that the existence of a considerable number of people out of work is a necessary condition for jobs and wages to be undermined. A solution must involve the creation of more pgenuine jobs.

Even using what the ABS provides, there remains a significant 13.4 percent of the workforce not having what can be considered proper secure jobs.

Although the last quarter ABS figures did see a slight fall in the unemployment rate, 300 full time jobs went, while 29,200 part time jobs created. This tells us that the ongoing causualisation of work is continuing in full swing.

Employers are using the opportunity to profit by cutting back of the share going to labour, rather than through increasing the output of their businesses. They are not investing in the Australian economy. Insufficient useful investment and declining real wages are central to the poor performance of the Australian economy, which is not growing at all in real terms.

Under the existing circumstances, growth needs economic stimulus. Since the private sector is failing to provide this, there must be public investment to create enterprises that will stimulate strategic industries. Those who insist that the trick is to lower the already negligible interest rate down to 0.25 percent, either don’t know what they are talking about, or are trying to throw sand into peoples’ eyes.

It will have little effect. Investment is not absent because of too high an interest rate. Mortgage repayments might do down slightly. But not enough to make a huge difference.

In addition to investment, economic growth requires more disposable income in the hands of wage earners, to create the necessary demand in the economy. Without this, the domestic market shrinks and businesses cut back.

It is also important to outlaw wage theft and ensure that the penalty is severe enough to deter employers going down this road.

Decent unemployment benefits are needed. enough ensure that those out of work are not forced into becoming a cheap labour force to be used to undermine others. This is another reason why the ongoing campaign to raise Newstart by at least $75 a week is important.

None of this is going to happen easily. Powerful interests benefiting from the way things are and not form economic growth. They happen to be closely tied to the government and like it just the way it is.

Australia has witnessed the goings on in George Calombaris’ restaurant empire. Underpayment at Coles, Target, Woolworths, Bunnings are now making news. Before all this was 7-Eleven’s exploitation of vulnerable workers.. This is only the tip of the iceberg. Many more employers are doing it, and it goes much further than the hospitality industry.

The rise of labour hire companies has been another part of the push to cut wages and avoiding the cost of creating and maintaining decent and safe workplaces.

Australia is coming to know, and the public mood is that wage theft has got to end. The future of Australia depends on this.

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