This divide exists - no longer between the blue-collar and white-collar worker - it is between those in the ‘core’ of the workforce and those on the ‘periphery’.
THOSE IN THE CORE are likely to be in full-time employment, either permanently within organisations, in management positions, or possessing skills for which there is steady demand and for which they can charge a premium. They are likely to enjoy sick leave, paid holidays and in many cases parental leave above the Government’s universal scheme.
For them, flexibility means the chance to work in a variety of industries, to work overseas, to earn good money freelancing or in a secure part-time arrangement. Periods of unemployment are likely to be short or voluntary.
Below and around this group are those on the periphery. They are employed on various insecure arrangements, casual, contract or through labour hire companies, on low wages and with no benefits.
Many do not know what hours they will work from week to week, and often juggle multiple jobs to attempt to earn what they need.
Their skills are low, or outdated, and they are not offered training through work. They shift between periods of unemployment and underemployment that destroy their ability to save money.
Their work is not a ‘career’; it is a series of unrelated temporary positions that they need to pay rent, bills and food.
For them, flexibility is not knowing when and where they will work, facing the risk of being laid off with no warning, and being required to fit family responsibilities around unpredictable periods of work.
For many, life on the periphery is not a temporary situation; there is no pathway in to the core.
Last year when I was asked by the ACTU to chair an Inquiry into the nature of work in today’s economy, I have to admit that I didn’t have a clear understanding of the spread of insecure work.
The internationalisation of Australia’s economy over the past 30 years has undoubtedly improved living standards in Australia.
However, at the same time the changes that have occurred in Australian society have also given driven the unprecedented growth of insecure work.
This has occurred for a number of reasons, but the key driver has been the emergence of a business model across the entire economy that shifts the risks associated with work from the employer to the employee, and minimises labour costs at the expense of job quality.
For too many people in their late 20s, with children and mortgages and no time to retrain; or older men in their 50s who have lost full-time work, this is their permanent position.
This uncertainty makes people more sensitive to rises in interest rates, of power bills and petrol prices. It is difficult to feel relief at meeting this month’s mortgage payment, when it is simply replaced by anxiety about next month’s.
For the first time in our history since Federation, Australia is seeing the development of a working poor – a trend that has coincided with the growth of insecure work since the 1980s.
As long as we can retain our relatively high minimum wages and universal health insurance system, we will not see the extremes of poverty of the USA, but we will see a society with families where one or both parents work, but who are unable to save or own a home, and remain vulnerable to the slightest financial crisis.
Our family payments system – among the most generous in the OECD – also ameliorates some of the effects of intermittent and low-paid work. But the growth of insecure work means more pressure is placed on that system.
What this means for social mobility and social cohesion is the great unknown, and a subject that is only obliquely referred to in political debate.
This is particularly the case when combined with a growing number of inter-generational jobless households.
This was an issue crying out for a deep, far-reaching investigation.
But investigation is not enough – the growing crisis of insecure work cries out for action that will translate our findings into real change for the people most affected.
Stories of insecure work
The stories we heard throughout our Inquiry were compelling and often confronting.
We heard from workers in every sector of the economy, whether in capital cities or in regional areas – men and women, blue collar and white collar, working in the public sector and the private sector, in secondary or tertiary industries or service industries.
Contrary to the views of some in the business lobby that workers are attracted to casual and temporary work because of the flexibility it offers, the evidence we heard confirms that there are huge numbers of people engaged in insecure work who want more secure and stable working arrangements, but find themselves trapped on the periphery of the workforce.
We saw evidence of this right across the economy:
- Workplaces have emerged in manufacturing, warehousing and logistics where the vast majority of workers are employed through labour hire agencies – an environment where employees are afraid to raise issues about their pay, conditions or occupational health and safety for fear of not being given any more shifts.
- In one case in western Sydney, we encountered a manufacturing plant were the entire staff were employed as casuals through a labour hire firm. Employees were expected to be available for a full-working week, and were notified by text message around 4pm each day of whether and when they were required to turn up the next day – but without any information about how long their shift
- would be.
- In every city and town we visited we met school teachers, TAFE teachers and university staff employed on a casual basis or on rolling fixed-term contracts. What was once seen as a life-long vocation at the end of years of tertiary study is now treated by the Government as a temporary job.
- We met countless casual workers in low-paying industries like security, contract cleaning, call-centres and child care – workers who face unstable and variable working hours, pay so low that many of them have to hold down two or three jobs to make ends meet, little or no access to paid leave, and little or no say at work.
- In Sydney we heard from women paid piece rates in the textiles industry that amount to $4 to $5 per hour to produce garments with a retail value of up to $1,000. The multilayered supply chain they work in means there might be five or six contracting levels between the worker and the retailer, leaving these women with no bargaining power and no ability to push back against intimidation, harassment and bullying.
- Insecure work is rife in the not-for-profit sector – particularly amongst frontline workers delivering critical community services.
- The Commonwealth and State public services are increasingly engaging fixed-term contractors and labour hire agencies to deliver core activities, at the expense of ongoing employees. The NSW State Government alone spends $500 million annually employing nearly 12,000 temporary employees through labour hire agencies.
- We heard many accounts of contractors working in the telecommunications industry who, though independent by law, are in reality dependent on a single client and in some cases explicitly required under their contracts not to accept any other work.
Again and again there were illustrations of the insensitivity of employers to the importance of certainty in rostering for families caring for children, ageing parents or a family member with a disability.
Protecting and Investing in the workforce
Put simply, these workers require greater protection in our industrial relations system.
But tackling the problem of insecure work cannot be reduced to a question of regulation.
The technological and information revolution has transformed the nature and organisation of work, requiring an ongoing commitment to improving the education and skills of our work force.
An open economy in an internationally competitive environment like Australia’s will never be able to compete by driving down labour costs. Instead we need to focus on productivity, innovation and improving the skills of our workforce.
To do that, we need to be radical in thinking about new approaches to training and educating our workforce.
Without very serious investment in marginal workers nothing much is going to change.
There is a message here for business, which ignores the rise of insecure work at its peril. A business model that is predicated on short-term profits generated by widespread use of insecure work is unsustainable in the long run.
This has been highlighted during the shallow national debate around productivity, in which business groups have attempted to convince us that the only way to increase productivity is to cut wages and conditions.
This ignores the fact that the main long-term drivers of productivity are investment in industry, infrastructure, and in the skills of workers.
As Michael Keating, the former head of the Department of Prime Minister and Cabinet, has noted: ‘the critical problem facing Australia is that there is a structural mismatch between the labour supply and the demand for labour. There is a shortage of skilled labour and a substantial excess supply of people with low education and skill levels’.
The nature of the training required has also changed.
In the past employers, at the employer’s cost, provided most training for people without
post-school qualifications. But this approach biases training in favour of very job specific competencies.
In a world of constantly changing technology, people need more generic skills that enable them to change jobs and to engage in continuous learning.
The economic changes of the past two decades cannot be unwound. But the unforeseen consequences of insecure work must be addressed to continue to produce jobs that will preserve the Australian social contract that has provided a decent welfare safety net, and a chance at social mobility, for generations of citizens and migrants.
Changes are needed not only to our employment and labour laws, but to the role of government and the social security and tax transfer systems, to education, training and labour market transitions.
First, labour law must be reformed to provide a universal set of protections to all Australian workers.
Australia must pursue universality in labour law. Doing this effectively requires:
- Reforms to better capture indirect employment arrangements like labour hire and dependent contracting;
- Expanded National Employment Standards that create a set of inclusive minimum standards that protect all employees;
- A firmer definition of casual work; and
- Expanded legal definitions of employers and employees in the Fair Work Act.
However, simply refining labour market regulation won’t limit the growth of insecure work.
To provide decent work for all, we also need to invest more in our workforce to ensure that an effective safety net is in place for people who fall out of work, especially the most disadvantaged.
We have called for a number of reforms aimed at achieving a more skilled workforce, including:
- A broader focus on work-life transitions, rather than the narrow preoccupation with the transition between employment and unemployment that has led to an emphasis on ‘Welfare-to-Work’ initiatives.
- A commitment to lifelong learning and learning accounts as a model for investing in the capability of workers over the lifetime.
- Reform to Australia’s tax and transfers system to provide a stronger safety net by:
- Addressing the woeful inadequacy of the Newstart Allowance;
- Simplifying income declaration systems; and
- Abolishing the Liquid Assets Waiting Period.
- Changes to the way Job Services Australia interacts with forms of insecure work such as labour hire.
We have also called for policy makers to investigate models for a comprehensive system of employment insurance.
Government also needs to take its role more seriously, and recognise just how influential it is as one of the largest employers in the country.
Governments at all levels need to make stronger use of their leverage as employers, funders and purchasers to support secure forms of employment.
The challenge for the labour movement
The crisis of insecure work cries out for action that will deliver real change for the people who need it.
In many ways, our Inquiry has barely scratched the surface of the issue.
There is a felt grievance in the community about the way our relationship with work has changed, and the consequences this has had for workers, their families and the community.
Rather than try to turn back the clock on the reforms of the past quarter of century, the labour movement needs to provide a vision for the future of work in the post-industrial economy.
The Inquiry delivered its report to ACTU Congress on May 16, 2012. You can read the reporthere.
Melbourne photographer Grant Hobson produced a photo essay to illustrate the report. Visit Grant's website here.
Author: Brian Howe
Brian Howe AO is former Labor Deputy Prime Minister and chaired the recent ACTU inquiry into insecure work.