It’s the May Day holiday in Queensland, which I’ve observed by starting my long-promised post on contract employment and casualisation. What I have so far is only a first attempt at tackling the issues.
The two big changes in working life in Australia over the past twenty-five years or so have been, first, the reversal of the long-standing trend towards shorter working hours under standard conditions of full-time full-year employment, and, second, the displacement of full-time full-year employment by various combinations of part-time, casual and contract employment.
I’ve written a bit about working hours and holidays in the past, and Jason Soon has more. So I’ll talk a bit about the other developments.
Contracts and casualisation
Considered in isolation, the growth of part-time employment is mostly a positive development. For many households, an employment pattern based on one full-time earner and one part-time provides a reasonable balance between work and family responsibilities. Part-time employment also provides work experience for young people (although as an academic, I think students would be better off working more on their studies and less in the fast-food industry). The main groups for whom part-time work is inherently a negative are those who want full-time work and can’t get it, and, even more, those who patch an inadequate income together from two or three part-time jobs.
The big problems come from casualisation (something commonly, but not exclusively, associated with part-time work) and contracting.
Data on casual employment is a bit tricky, as the ABS has changed definitions, so I’ll have to rely on slightly old data for now, but the same trends have continued. Between August 1988 and August 1998, there was a substantial increase in the proportion of casual employees, from 19% to 27%, and this increase was concentrated among males. the number of non-casual male employees actually decreased by 2% from 3,127,800 to 3,064,100,
Casual employment is preferred by some workers, mainly those with a weak attachment to the labour force, who prefer a higher (by 15-25 per cent) hourly rate to leave entitlements and any expectation of continuing employment. For people who want permanent work, though, casual employment is clearly an inferior option. It seems unlikely that the massive conversion of male workers from permanent to casual status reflects an exogenous decline in labour force attachment. Rather, this is part of the process by which the labour force has split into two parts: a core with a career path and high pay, working increasingly long hours, and a periperhal casualised and marginalised workforce.
It’s not surprising in this context, that participation rates for older workers are declining so sharply. Those in the core workforce are frequently burned out by long hours and high pressure, and have the resources to make early retirement affordable. And once they are over 50, those in the periphery find it virtually impossible to regain work after becoming unemployed.
Casualisation allows employers to achieve substantial cost reductions in the short run, and no doubt contributed to the big burst of productivity growth in the mid-1990s. But its long-term effects are highly damaging.
The other big development is the rise of contract-based work. This is really two developments. The first is the replacement of awards and enterprise agreements by individual contracts for employees. If there are any benefits from this process for employees, I find it hard to discern them. In most large enterprises, employees are offered a standard contract with no negotiation regarding terms, except for starting salary (it’s very hard to get data on this kind of thing, so if anyone has evidence about the frequency of contract variations, I’d be glad to see it). So, there’s no individual customisation and employees lose the protections that are commonly inserted in awards or enterprise bargains.
More radical is the shift from employment to self-employment as an individual contractor. It’s hard to get accurate figures on this. In many cases contractors are just employees under a new name, with the same employer, usually worse working conditions, offset by a greater capacity to avoid/evade tax. This kind of conversion is even worse than a shift to employment contracts. And for professional workers, self-employment as a ‘consultant’ or ‘freelance’ is commonly a euphemism for unemployment.
There’s no good evidence on the proportion of genuinely self-employed workers in Australia, but it’s reasonable to think the proportion is increasing. However, growth seems to be relatively modest doesn’t support the claims of some that large numbers of Australians have suddenly embraced the entrepreneurial spirit and no longer need or want the protection of unions. Like other forms of contracting, the growth of self-employment owes more to the push out of secure employment than to the pull of the free market. There was a lot of overheated optimism about the ‘free agent’ nation during the dotcom boom, but the realities of self-employment became glaringly apparent during the subsequent crash.
What, if anything, can be done to reverse the decline in standard employment. I suspect that a necessary condition is a sustained period of reasonably low unemployment, with labour shortages in at least some parts of the economy. High unemployment favours employers who casualise their workforce, since anyone who leaves can easily be replaced.
In policy terms, I can think of a few steps that are worth considering:
(i) a renewed push to increase the availability of part-time work
(ii) scrapping preferential tax treatment for contractors, real and spurious
(iii) removing some of the disabilities that have been imposed on unions in the last two decades, particularly civil tort liability derived from the law of master and servant
(iv) expanding permanent employment in the public sector (I’m not speaking here about lifetime tenure, but about standard employment as opposed to casualisation and contracting out.)
John Quiggin 
“In many cases contractors are just employees under a new name, with the same employer, usually worse working conditions, offset by a greater capacity to avoid/evade tax.”
An extra dimension here is the extra opportunities for employers to rort various insurance/tax reduction set-ups. An example in my experience is the farmer whose grounds I gardened. No contract entered but the agreement was my professional oversight and responsibility for an hourly rate.
I discovered that the farmer was counting me as an employee in some inclusive insurance contract – all the while I was covering myself against all – even liability for my machinery on his property. And I found that this was general practice around the town.
“And once [workers] are over 50, those in the periphery find it virtually impossible to regain work after becoming unemployed”.
John,
I think you’ll find that the age threshold for being “too old” here is about 30, and has been so for at least 10 years.
And I admire your general optimism that this problem may be fixable, but where’s the political party that might implement something like what you suggest? Look at Labor’s Bill Shorten in today’s Oz:
“Some steelworkers I know at a OneSteel fabrication plant are doing something about Australia’s rotten tax system. Having calculated how much they can earn before paying the top income tax rate of 47c in the dollar, they simply refuse to work any overtime that pushes them above the limit”.
http://www.theaustralian.news.com.au/common/story_page/0,5744,15156970%255E7583,00.html
Dunno what circles Shorten moves in, but personally I don’t know anyone who gets *paid* overtime. And if I did, I think that they’d be pathetically grateful to get to do it – tax rate of 47c in the dollar, and all.
A big effect of casualisation is to destroy the value of one’s future earnings stream as an asset against which to borrow and as a source of confidence about the future.
I was fortunate in getting a permanent job straight out of uni. A lender was happy to advance most of the purchase price of a home secured, in effect, against my ongoing income stream. And I continued to hold permanent jobs for the rest of my working life until I was retrenched.
My son has a more dismal story. For the best part of 15 years he has been living out of a suitcase on 2-year research contracts. Finally at the age of 35 he has found a permanent job and can entertain the possibility of putting down some roots.
Mathematician Paul Erdos was famous for his peripatetic lifestyle, surviving happily with no permanent home, but it does not suit most people.
What is just as worrying as the impact on individuals of casualisation and contracting is the impact on the economy as a whole. Recent research conducted by the Australian Expert Group in Industry Studies for the AMWU found a strong connection between outsourcing (contracting and labour hire) and the massive skills shortage. There was a similar deleterious impact on the tax base. Even the Productivity Commission has recognised that a major portion, if not the majority, of the growth in contracting recently has been in ‘dependent contracting’ which is just disguised employment.
People might want to have a look at the full submission available at
Click to access sub46.pdf
Go Pat! And I think it would pay to take a look at the changes in the compositon of employment in Australia since we all became so keen to privatize, reduce tariffs, contract out and generally shoot ourselves in the foot. Oh, yes, and some reference to the decline of the union movement associated with IR changes during the Hawke and Keating (let alone Howard) years could also be illuminating.
Hands up who hates that common rhetorical cliche used by employer groups, politicians and others who support casualisation, that anyone who supports permanent employment (ie with holidays and sick pay or the pro rata equivalent if part time plus some security of employment) is asking for a “job for life”. Presto, we’re fuddy duddies who just want to fester at the same desk for 50 years like Bristow. That’s a strawman which needs a bit of burning. Everyone wants a career change every so often, but not to be forced into it every two years.
PrQ,
Unlike those posters above, I disagree that the changes in workforce composition that we are seeing are necessarily a problem. You seem to make a nod towards this with your comments in your first paragraph, and I would agree that more part-time work would be a good thing, but you offer no real data.
For the rest of the post you are highly critical of casual work and it’s supposed bad effects – in fact you characterise its long-term effects as “highly damaging”. After a statement like that I would like to see some objective proof – yet you offer none.
I have previously worked as a contractor for several firms and I do not feel the effects were highly damaging – the advantages (working in a field I enjoy) greatly outweighed the disadvantages (uncertainty). My field of work is quite specialised, so it made no sense for a firm to take me on for an indefinite period when they would only need my skills for a finite period. The pay rate, as you rightly point out, is designed to compensate for that.
With the decline of the big firms that were able to offer the long-term (permanent) contracts this sort of process is inevitable. A small firm may need a project manager or a welder or some other specialist skill only for a limited period but not want to contract the work out – so a casual worker makes sense.
I see the other big driver in this being restrictive labour laws – companies normally react to more and more impositions if you hire a permanent employee by reducing the number of permanents and increasing the number of casuals.
I expect that you will respond to that by saying that the laws are now less restrictive – but once you add the regulatory burden I would say that is not correct. For example, the amount of work that needs to be done to take on an employee and to fire them if they are incompetent, disruptive or otherwise not worth what the firm is paying them is extreme. Once you are over a certain size, the size where you can typically look at taking on specialist staff, the difficulty in firing staff makes paying them off cheaper. The incentive is, therefore, to take them on as casuals.
On your four points – the top two I agree with. The greater flexibility of a part time role is an advantage for both parties. The second point I can also agree with – and I would propose that a flat tax is an ideal way to do this.
Points 3 and 4, however, I feel you are wrong on. Point 3 (IMHO) would act to either reduce employment or further increase casual work, or both, as employers sought to limit the ability of unions to interfere in their ability to run their business. On point 4, I feel that employment in the public sector should be reduced overall, but if you are proposing an increase in the percentage employed permanently (rather than an absolute number) that should be down to whatever does the job best.
In the discussion around contracting/casualisation, its important to distinguish the market power of the contractor. Its true that many well-paid high skill contractors (IT consultants being the archetypical case) can make a very good living from contract work and are pretty much guaranteed that they will have ongoing work.
The other group, part of the periphery, is in a much worse position. In work done at the Brotherhood of St Laurence (http://www.bsl.org.au/pdfs/pressuresapr02.pdf), we found that people had to deal with the short-term risks of uncertain income, hours and duration of work, and long-term difficulty in planning for families, savings and home ownership etc. In this sense, casualisation is particularly damaging. Its also well documented that casual workers have less access to training, reinforcing their place at the bottom of the labour market.
Andrew Reynolds
I think there are benefits to casualisation for a skilled worker (which you appear to be), but most casualisation seems to be imposed upon the unskilled, who don’t obtain any obvious benefits from it, as unlike a skilled worker have no bargaining power.
I agree with you that a big driver of casualisation has been restrictive labour laws. Large employers often find themselves with a core of useless workers who they simply cannot get rid of. What they do is retrench those guys and then ensure they don’t have the same problem by putting on casuals. Qantas and Telstra for example have been through this process.
Simon,
If you are correct in your second paragraph (and I would agree with you) then the remedy to the problem identified in your first paragraph is to reduce regulation and free up the labour market still further.
I do not think that our host on this website would necessarily agree, however.
“(ii) scrapping preferential tax treatment for contractors, real and spurious”
Since the personal services income tax provisions came into effect two years ago there are NO preferential tax treatments for contractors. (Notwithstanding those who live in fear of a tax audit)
John,
Much of what you are arguing here is being put forward as a union wish list in the Rann Government’s Fair Work Bill, much of which is being emasculated as unworkable in the Legislative Council, upon the advice of employer groups. The Feds will override it all under their Corporations powers of course, at least for Companies.
The general thrust of such legislation is to allow unions to try and set wages and conditions in a globalised world. If that weren’t nonsensical enough, it is hard to see how union awards for ’employees’ can sit comfortably alongside any regime of entitlement to self-employment. Basically the right to self employment haemorrages any PAYE employees bargaining position. I have hardly ever met a secure, well paid PAYE taxpayer who is happy to employ a tradesman around their home on an ‘appropriate’ hourly rate. They will inevitably demand a number of quotes to choose from, although with the shrinking tradeforce, the ability to get such quotes is becoming increasingly tenuos. Nowadays you have to ‘sing’ the right tune to get good trades- basically that money is no object for you. As for choosing a good restaurant on the basis of checking up on its compliance with awards and PAYE records well…..
Furthermore you state one part of the solution is “scrapping preferential tax treatment for contractors, real and spurious” Can I suggest that almost all of the economic solutions you and others proffer for perceived socio-economic problems these days, often boil down to complaints about measuring income and how to tax it ‘fairly’. Here again is a classic example. Can I ask you to explain how you would go about ‘fixing up’ real and spurious preferential tax treatment for contractors, because I reckon the ALPand the unions( if not the the ATO) are all ears if you can. Personally, I am increasingly of the view, that income taxation is going the way of the dinosaurs.
Re reducing regulation and freeing up the labour market still further. Looking at the US, Australia and the UK and comparing them with Europe one can easily identify a number of long term negatives with a more flexible system. On the other hand, if you look at France, for example, apart from slower growth rates than these three economies, a worrying problem is the difficulty many migrants have in getting into decent heavily protected jobs. The French employment system, at least at first glance, appears to be essentially like the Australian academic employment system it is ridiculously biased in favour of those in position and discriminates heavily against those seeking to enter. Apart from anything else, this is a contributing factor (along with cultural and religious factors) to the alienation felt by large sections of the Muslim population.
John
This statement needs some teasing out, I believe:
‘Casualisation allows employers to achieve substantial cost reductions in the short run, and no doubt contributed to the big burst of productivity growth in the mid-1990s.’
Cost reductions can come from either lower wages or higher productivity. Up to this point you seem to have been talking about casualisation as a sneaky way of reducing the wage share. But if it has helped boost productivity, wages might still have still risen in absolute terms and maybe workers should on balance support the changes. Unless… you want to make the point about productivity versus work intensity, i.e. that casual workers can be pushed harder, that their resulting highre output is not really higher productivity as normally understand, and that there may be a net utility loss.
On a second point, I understand your claim that labour shortages might force employers to offer more secure tenure. But I suspect, on the other hand, that it’s partly because of favourable macroeconomic circumstances that the Liberals and technocratic Labor goverments have been allowed to go so far down this road. Life is OK for contractors in a buoyant economy, but maybe the working class a whole will demand a halt to ‘reform’ when there’s a downturn and they feel much less secure.
Incidentally, there’s something wrong with the sentence that starts: ‘However, growth seems to be relatively modest doesn’t support the claims…’
Sigh. Why don’t people ever follow up PRofessor Kim Swales’ work in the area?
PML – maybe it is because the link doesn’t work. Just a thought.
PML, I have been neglecting your repeated comments on Swales for a long time, so let me make amends here. As I read him, Swales is advocating a wage subsidy financed by an increase in the rate of VAT or GST.
In the Australian context, it’s natural to modify this to say that, rather than creating a new wage subsidy we should scrap the existing payroll tax. This was part of the package I proposed in my 1998 book Taxing Times. This book also contains a discussion of theoretical arguments showing that, under certain conditions, GST and payroll taxes are equivalent in their incidence. I don’t think the necessary conditions apply, so switching from payroll tax to GST (with indexation of pensions etc) would be beneficial.
John,
A couple of comments from my understanding of the issue;
– the ” slightly higher hourly rate” you refer to , at least in Queensland, is about 25% – hardly slight
-AWA’s represent an opportunity for individual rather than collective bargaining but the rules are similar.
1. An employee can ask a Union to represent him/her and the employer is obliged to accept it.
2. the Employment Advocate approves the AWA in light of a “no overall disadvantage” test as with an EBA
– a new or existing employee cannot be compelled to sign an AWA. This is different from an EBA which is held to bind all new employees
– an AWA is still underpinned by an Award as is an EBA
AWA’s (which I’ve admittedly got little experience of) represent a choice – something which was sadly lacking 20 years ago.
I do have considerable experience of individual contractors and their reasons for making this choice seem to be income (they generally make a lot more as a contractor than an employee) , tax minimisation and the ability to benefit from reward for effort.
Given the financial disincentive to employ casuals and the obvious problems lack of continuity presents to an employer , might it be just possible that the growth in casualisation is at least partly linked to a reluctance for employer’s to expose themselves to the expense of unfair dismissal costs/implications?
The decline in union membership has continued despite the advantages that union’s enjoy in terms of recognition and representation.
At some point this may have to be considered a problem Union’s have to confront about themselves – people don’t seem to want to buy their product anymore – rather than an attack by government.
Jim
Proven methods of eliciting a response from the Captain:
1. Agree to stop saying pee-cee and multi-culti.
2. Open your comment with ‘Sigh’. (I wonder if ‘Sob’ would work.)
3.?
Feel free to add to the list.
Economics, it seems to me, is often very ideological. I do not presume to comment as to whether it is dreary or not.
I suppose that unemployment can be viewed as a positive development, providing the human resources, that is people with their range of personalities, talents and abilities, can be moved to more productive areas of the economy. Potentially this can be a stimulus for innovation, but it seems not in the way we think about employment and unemployment, especially for the underclass, the non-core workers.
I suspect the Government, at least, is very deeply inbued with the Calvinist notion of salvation:the undeserving should go to hell, starting with their time on earth.
I was surprised to read JQ’s wish list 1-4 as they appear to be regressive, regulated and restrictive. I thought that a more progressive attitude would be forthcoming?
But what would I know, I’m just a ‘worker’.
PS May Day, isnt that a signal that you are in distress?
Michael Burgess – congratulations, you’ve outdone yourself. I didn’t think even you would be able to make the connection between a discussion about the merits of casualisation and the seething mass of Muslims ever eager to destroy the West, but you’ve pulled it off. And as a bonus, you’ve added the now obligatory dig at the universities.
We are truly in the presence of a master. The question is, master what?
Anyway, back to casualisation. From where I sit, it’s all very straightforward. For people like Andrew Reynolds, who are happy to take on the risks of casualisation, like periodic unemployment, in exchange for more dollars per hour when they are working, casualisation is a Good Thing.
Others, however, would prefer less dollars per hour in exchange for more certain hours. They should not be forced into working casually.
Michael, I think the number Muslims, or at least those of Muslim background, employed by my university seems to reflect the percentage of Muslms in the general population. I haven’t met any Muslims yet who are angry about missing out on academic jobs (unless you and Paul Watson are Muslims).
John,
It’s a very vexed question. I don’t have a problem with the kind of world you’d like to create, but I’m not too sure about how to do it. My own experience with labour market interventions like unfair dismissal and so on has been that they turn into a legal morass in no time and that they are then simply used by those seeking to game the system and businesses then get their lawyers to write up procedures that they must follow to achieve what they want to achieve.
It all ends up being pretty farcical.
Dave Ricardo,
In your typical sanctimonious and ideological rigid style you state that ‘I didn’t think even you would be able to make the connection between a discussion about the merits of casualisation and the seething mass of Muslims ever eager to destroy the West.’ Well actually the French government which has steadfastly refused to draw such a link is starting to come around and is being applauded for do so by many progressives. What is your problem, there clear is a link between heavy job protection on one hand and new migrants and others trying to get an entry into the labour market on the other. It is easier to get a job as a migrant in the UK than it is France. Now in saying that I am not favouring the type of deregulated labour market favoured by right wing fanatics just simply pointing our the issue is far more complex than ideologically rigid individuals such as yourself admit. As for my supposed constant digs at Universities. Well they are supposed to be the home of critical thinking, they are not –so I will continue to criticise them.
“there clear[ly] is a link between heavy job protection on one hand and new migrants and others trying to get an entry into the labour market on the other. ”
Maybe so, but what’s it got to do with the migrants and others being Muslims?
Dave, because a high percent of Muslims in France are unemployed and they form a significant percent of total employment it clearly is a critical issues of the French state as they have recently recognised.
Michael
The reason that Muslims have such rates of high unemployment in France is for a number of reasons, many which have nothing to do with the rigidity of the labour market. In addition, even if it was initially the cause, then even if you fixed up the system now, it probably wouldn’t help their employment prospects much, since, as a whole, they are an extremely large and poorly educated group that is not well integrated into traditional French society.
As a comparison, similar problems (and unemploment levels) can be seen with certain minority groups in Australia, despite the slightly less corrupt employment and less rigid employment practises. Similarly, if I took whites from equally as poor and shitty areas (say housing estates), I doubt their employment success rate (or their childrens) would be much better either.
Jim’s understanding of AWAs does not reflect reality:
“a new or existing employee cannot be compelled to sign an AWA” – In reality many employers make it clear that if people do not accept an AWA they will not get the job – everyone knows its happening, but it is very difficult to prove.
“an AWA is still underpinned by an Award” – No the AWA replaces the award. Furthermore the No Disadvantage test is a joke, with it being a global test and up to the employment advocate to decide (hardly a balanced body).
In addition, the AWA is confidential and it is an offence to reveal the terms of the AWA, making it impossible to compare your wages to someone doing the same job.
The myth is that AWAs are about flexability and tailoring an agreement to meet individual needs. This is a lie that is demonstrated by the fact that the employment advocate spends millions of dollars developing and promoting a ‘template’ AWA. Most AWAs would be standardised and the only individual needs that are meet by them are the employers.
They are really about forcing employees to negotiate one on one with their boss, which in almost all cases is an unequal bargaining position (in some rare instances there are exceptions where the workers are highly skilled and irreplacable).
There is no reason why relatively low skilled workers (such as waiters in the example of the ‘my restaurant rules’) should be forced to go on AWAs.
Conrad, I agree its a complex issue and I think that affirmative action policies are also necessary (although they can be exploited as far too rapid promotion by young middle class women [who have never suffered discrimination] in the Australian public shows). However, I find it difficult to believe that inflexible labour markets which make entry harder do not discrimate particularly against migrants.
Michael, what difference does it make that they are Muslims?
Dave, the difference is clearly that there is a large and growing underclass of alienated Muslim youth who not finding jobs are turning to extremist Islamic ideologies.
I’d prefer it if we dropped the topic of Muslim alienation and focused this thread on the Australian labour market, thanks
It’d take a long comment indeed to cover what IMO is insightful in this post and what is not, or is just plain wrong. I’m on my lunch break, so I’ll start with the just plain wrong. If the thread stays alive I’ll impart the benefit of my wisdom at more length later – that threat oughtta shut you all up 🙂
“Data on casual employment is a bit tricky, as the ABS has changed definitions”
They changed it for good reason – on examination, they realised that not having entitlements to paid annual leave is, in the labour market of the last 20 or 30 years, not much of a guide to other working conditions, nor to expected job tenure. So the rise in ‘casual’ employment prior to the change really is not evidence of any changes in these other conditions or in tenure.
And since 1998 under the new definition there has – surprise, surprise – been no such trend.
” [those] who prefer a slightly higher hourly rate to any expectation of continuing employment”
15-25% is not a “slightly” higher rate when you’re on a low income.
“participation rates for older workers are declining so sharply”
A damaging and widespread *myth*. The Emp/Pop ratio for males over 55 bottomed in the recession of 1992-93 and has consistently *risen* in the twelve years since. Both the FT and PT E/P ratio for this group are now 11 percentage points higher than its trough. The E/P ratio for women in that age group is now over 20 ppts higher than in 1993 (though the FT E/P ratio is “only” 10 ppts higher).
“the labour force has split into two parts: a core with a career path and high pay, working increasingly long hours, and a periperhal casualised and marginalised workforce”
The Doehringer & Piore stuff has always applied here. The main difference is the sort of work being done in the two groups. For instance we once supported a large marginally attached casual *rural* labour force who were invisible to union bosses, labour economists and policy makers.
“More radical is the shift from employment to self-employment as an individual contractor. It’s hard to get accurate figures on this.”
FWIW measured self-employment has been stradily *falling* in the past 20 years. True, there are definitional problems, but the assertion that despite the figures it has in fact increased needs evidence. You can’t just assume that is has in fact grown because it fits your priors.
“What, if anything, can be done to reverse the decline in standard employment”
Surely you should ask first “what, if anything, *should* be done”. It does not seem at all obvious to me that constraining people’s working arrangements represents a welfare gain. If there are oppressive work conditions due to a power imbalance it is the power imbalance that should be addressed (not least by trying for full employment) rather than the bargaining flexibility.
DD, can you give me age-specific info on participation rates? I’ll be happy to correct errors on this.
On self-employment, I must admit to having assumed that those on the other side of the debate, who’ve been making a big noise about the growitn of contracting, had some factual basis for their claims. I’ll be happy to correct here.
On your final point, I’d be interested to see your suggestions for redressing the power balance between employers and individual workers – I don’t think full employment, as defined by a 5 per cent rate, comes anywhere doing this. In the meantime, I’m happy to support intervention.
Pat,
The legislation does not allow employers to compel prospective employees to sign an AWA. This has been upheld by the AIRC who has found against employers who tried to do so. Maybe the enforcement regime is deficient – I’ll rely on the confidence of your assertion that “many� employers are breaking the law – but that isn’t a reason to deny choice to employees.
At any rate, the take-up of AWA’s is so small that a conclusion could be drawn that employers as well as employees hardly see them as an all-encompassing solution. They’re simply another choice.
AWA’a are underpinned and compared to the relevant Award.
Just a fortnight or so ago , the Employment Advocate (on behalf of mushroom workers I think it was) rejected an AWA because it didn’t meet the no-disadvantage test.
I have no doubt that the EA’s promotion of AWA’s is self serving but in this they are no different from any industrial organisation. Isn’t it possible that opposition to AWA’s from unions is based on self interest – an employee who negotiates directly with his/her boss might decide they don’t require the services of a third party?
I’m also interested as to why the EA is likely to be less balanced than the AIRC for example?
Finally, unequal bargaining positions occur in all walks of life. Sometimes between an employer and employee sometimes between a powerful union and an employer. The legislation surrounding negotiation of AWA’s as far as I can see attempts to put both parties on as equal footing as possible.
Jim, if you work for DEWR you have to sign an AWA – so I cannot see how the legislation does not compel prospective employees to sign an AWA.
Michael,
My apologies – I meant “existing” employees not “prospective”. Dashing an email in haste leads to errors! The cases I was referring to relate to existing – not future employees.
I do understand that new employees can be offered an AWA as a condition of employment.
I didn’t know DEWR insisted on it though – now that’s a real commitment to implementing Government policy!
Jim
John,
You aked DD for some age-specific info on participation rates. Here you go:
“Over the past decade, ageing baby boomers in the over-55 year age bracket have increased their share of the workforce from 8 per cent to 11.5 per cent, with their job growth in some years topping 10 per cent, an Age/Sydney Morning Herald study has found.
The employment forecast has found that there are now 1,036,000 Australians aged 55 to 65 in the workforce, up from 613,000 in 1995.
There are 733,000 over-55s working full time, up from 455,000 in 1995. Over the same period, the number of older part-time workers has doubled from 159,000 to 303,000”.
http://www.theage.com.au/articles/2004/05/25/1085461754376.html?from=storyrhs
Oh, and while we’re on about correcting myths about hard-bitten 50-somethings, here’s some interesting facts on the Disability Support Pension:
– since 1997, the average age of new DSP recipients has been 43 (Marcus Priest, “There are no jobs for these ‘boys'”, AFR 22 April 2005)
– post-teenage DSP recipients fall into two distinct age clusters: those born between 1962 and 1984, and those born between 1939 (i.e. the year in which the OAP kicks in for men) and 1959. There are almost no DSP recipients who were born in 1960 or 1961. The numbers of 39, 40, 41 and 42 y.o. recipients (born 1962-1965) are only again reached in the late 40s age group, with those born in 1956 (after which age the number goes predictably, consistently up).
Source: “Budget to reduce disabled, sole parent benefits” (Graph) AFR 13 April 2005
Paul, the participation rate for a given age bracket is neither the number of individuals (1,036,000) in the workforce, nor their share (11.5%) in the total workforce. It’s the number of individuals in the workforce divided by the population in that age group. So the growth you cited is largely a consequence of the population bulge (that’s where the word boomer comes from after all) in that age bracket. DD’s numbers show that the participation rate for males, though very sensitive to the business cycle, hasn’t changed since 1985. The rate for females, on the other hand, has almost doubled. But the rapid growth in female participation has come largely from married women, a process that started in the early seventies, and arises from very specific social changes.
The relevent data and much more will be in this ABS spreadsheet, but the file is huge and you need to belong to a subscribing institution. There is a zip version, but I wasn’t able to unzip it for some reason.
“DD’s numbers show that the participation rate for males, though very sensitive to the business cycle, hasn’t changed since 1985.”
Umm, not quite. They’re at about 1985 *levels* now – but they fell hard all through the 80s (including the boom years) and early 90s and have recovered since. They’re still trending up.
I wouldn’t describe that as no change.
Quiggin on Casualisation
I’ve been meaning for a while to draw attention to John’s post on casualisation. Lots of interesting thoughts and some sensible policy suggestions, as well as some vigorous debate in comments.
Two other issues that are related are the push by the …
AR, sorry – I put in “html” when I should have put “htm”. Try this instead.
JQ, Kim Swales’s work isn’t quite what you read it as. Although he himself uses the term “subsidy”, this is a loose usage. The effect works because this is an area where the point of impact does matter for game-theoretic reasons, so you can’t just simplify things down to incidence.
In this case, there is no funds outflow from the government but only an offset in amounts paid to it, and thus – technically but materially – no subsidy as such, at least until the implementation gets monetised. In fact, you could even implement the Swales scheme on top of a payroll tax, although I too would prefer to get rid of that. I would actually prefer another sort of carrying tax than GST, but GST is the broad based tax with impact on producers that we’ve got.
Since the impact and quantum matter, you would not get the same effect as the Swales scheme by merely switching from payroll tax to GST; there would remain the same failure to link revenue raising with social security outgoings.
For what it’s worth, the analysis I did (not shown on my publications page) showed that there is a long run equivalence between the Swales scheme, the “five economists’ plan”, and a guaranteed income set at a suitable level less than a living wage (unlike the Greens’ policy, which wants a “guaranteed adequate income”). In the even longer run, such a separate source of income need not be mediated by the government at all.
I see these options as aiming at the same underlying thing, with the Swales scheme being the fastest acting. As someone who would like to see governments working themselves out of a job I’d rather have it as a first stage of a transition, but first things first.
ABS stats (AUSTRALIAN LABOUR MARKET STATISTICS 6105.0 October 2004) show that particpation rates for men are still lower now than in 1983 for most age groups, but interestingly they are higher in the 60-64 age group. Perhaps the PM has inspired a new trend.
Particpation rates for 45+ are higher overall , due to higher participation of women.
In the fantastically improbable event that anyone is losing sleep because of participation rates, let me reveal that I managed to unzip the ABS spreadsheet referred to above, produce a rather ugly graph , and besmirch Baboon’s beautiful blog with it.