I would like to acknowledge the traditional owners of the land on which we meet today and pay my respects to elders past and present.
What a pleasure it is to address this conference today. Our two organisations – the ACTU and ACOSS – have much in common. In recent years we have worked together on a number of fronts, particularly closely on climate change through the Southern Cross Climate Coalition, on tax reform through the Community Tax Forum, and on housing affordability through the National Affordable Housing Summit. And, of course, we also collaborate much more informally all the time. I look forward to these links strengthening in coming years.
One thing that I believe both our organisations have in common is a determination to ensure that ordinary Australians, their families and their communities, have a voice in the big economic and social debates affecting our nation.
Over the past few decades, there has been a narrowing of perspectives in the national economic debate.
Indeed, all too often it is viewed solely through the prism of big business and the corporate sector. Workers, the community hardly get a look in.
And this is unacceptable because we all have a stake in the development of our economy. Working people have a valuable contribution to make to these debates.
It is timely that the topic of this session is ‘Productivity, Population and Participation’ because those subjects touch on a couple of issues that the ACTU and unions have been doing a lot of thinking about recently.
We see the transformation in the nature of work and the rise in precarious and insecure work as one of the most pressing issues for Australian workers. Any discussion about productivity and participation must encompass how we deal with insecure work.
Because I don’t believe issues of productivity and participation are mutually exclusive from having some control over your working life.
Over the past decade one of the biggest trends in the Australian workplace has been the move away from secure, permanent jobs.
Today, nearly half of all Australian workers are engaged as casuals, fixed term workers, contractors or labour hire workers.
These types of work have now increased to such an extent that they’re almost the norm.
In Australia today we are faced with the remarkable statistic that one in four employees is a casual employee.
This is over 2 million workers. This is one of the highest casualisation rates among the OECD countries.
In hospitality, 65% of all employees are casual. In agriculture, 44% of all employees are casual.
Forty percent of all employees in the retail industry are casuals.
Casual work has become a long term norm for many workers.
One in ten Australian workers are now independent contractors. This is over 1 million workers. Some of these workers are genuine contractors with lots of independence, who work for a number of different clients and earn a good income.
But many are economically dependent on a single client and many others are just plain ‘sham’ contractors – employees in all but name and entitlements.
For other workers, precariousness and job insecurity comes in the form of successive fixed term contracts. While this is still a relatively small proportion of the workforce, it is a big problem in industries such as education and training, and the public sector.
Precarious work is no longer confined to particular sectors or particular occupations. It’s experienced across the entire labour market – by men and women – and is increasingly the reality of paid work for many.
There’s no doubt that some workers do like to be casual. Others like the freedom and flexibility that comes with working as an independent contractor.
I don’t think anyone is questioning that there’s an appropriate role for these types of work and unions support their proper use.
But I don’t need to tell you that not all of the 2 million casual workers in Australia today want to be casual.
The fact is that many precarious workers – whether casual workers, contractors, fixed-term or labour hire workers – would prefer more secure and better quality jobs.
Research has found most casuals would prefer ongoing work, with paid leave entitlements. In fact ABS data shows us that more than half casual workers for example would forgo loading for a secure job.
And there is simply no evidence that casual work and contracting work provides any benefits in terms of better work-life outcomes or indeed productivity.
The costs of precarious work
precarious work means no entitlement to sick leave or annual leave, no paid public holidays. It means no job security, no matter how long you’ve worked for the same employer.
It means little – if any – control over working hours. It means not getting enough work to get by, or being required to work at short notice and not wanting to refuse shifts because this risks your access to more shifts in the future.
For many workers, precarious work also means lower pay. Casual workers are more likely to rely on the award safety net.
As our submission to this year’s National Minimum Wages Case highlights, average weekly earnings have risen by 21% in real terms since 2000, while the minimum wage has increased by just 7.1% in the same period.
Low paid workers are being left behind by economic growth, which is why we are seeking a $28 a week increase in the National Minimum Wage and 4.2% for most award-dependent workers.
Casual pay also has many other hazards – it can vary by the week, and over the year.
It is sometimes accompanied by long gaps, lacks minimum call in times and can be whittled away by work expenses.
Many precarious workers find it hard to predict their income, to pay bills and make ends meet.
They are underemployed, needing more hours and often turn to debt or social security to to cover gaps in income.
They find it much more difficult to borrow money, maintain a mortgage and organise their family needs.
Many worry about saving enough to ensure they have a decent living standard in retirement.
This is at the same time as workers are being asked to absorb more and more financial, social and economic risks.
There’s been a massive increase in financial risk among working families, with household debt levels above 150%. In addition, a growing proportion of household budgets are spent on services like health and education that were once provided by government.
And all this at a time when profits as a share of national income are at record levels, and wages’ share is the lowest since the early 1960s.
The reality is that the growth in non-standard types of employment has been driven overwhelmingly not by workers but by employers.
Under the guise of introducing ‘flexibility’ or ‘productivity’ into the workplace, employers have shifted many of the costs and risks associated with employment from themselves onto workers, including through the increasing use of precarious types of work.
This flexibility, of course, being code for the flexibility to hire workers when needed and to lay them off when business is slow. And, in the case of contractors or labour hire workers, not to have to worry about payroll, or paying workers comp or super.
Unions aren’t against flexibility.
Indeed we welcome discussion at the enterprise, sectoral or national level about productivity and flexibility.
But this has to be real flexibility – that works for workers, not just employers.
Campaigning for secure work
Some will tell us that this is just the way the Australian labour market is. That this is the future of work. A flexible workplace on the employer’s terms.
I’m sorry but I just don’t accept that.
I don’t accept that is it our future to be marginalised and voiceless in the workplace. To shoulder all the risks.
Nor do I accept that this is too big to change.
Precarious work is not just about the changing nature of employment in Australia and the changing nature of employment contracts.
It’s about the quality of that work.
And it’s about what this all means for workers, for their families and for our communities.
And for our businesses.
Let’s have that debate about the link between decent work and productivity. I note with interest that the World Bank itself is beginning to engage in such discussions and I will be interested to hear Saul’s take on that.
You will have read or heard in the media something about the campaign we are planning in this area.
I’m convinced that, through campaigning strongly on this issue, we can make a big difference for working people.
I want to invite ACOSS and the community sector to join this campaign, because I have no doubt that insecure work is an issue that impacts heavily on your clients.
Productivity and participation
Tackling the problem of precarious work is but one part of the equation of population, productivity and participation.
In the couple of minutes left to me, I’d like to give you a quick snapshot of a few other proposals from the union movement.
Let’s not underestimate the roll of skills and training as a driver of both participation and productivity.
Investment in skills and training is obviously critical to achieving the ambitious target set by Skills Australia of increasing labour market participation from the present 63-64% to 69% by 2025.
But it needs to be quality training that meets the skills needs of industry and is designed to deliver an individual a genuine job – not just training for training’s sake that only serves to boost the coffers of training providers or to supplement wage costs through govt subsidies.
The scope to improve participation should also feature more prominently in the current debate about skill shortages and skilled migration. We should be demanding greater employer effort in training and employing Australians – including apprentices – rather than the unsustainable quick fix of temporary migration.
Investment in training and skills development is also critical for productivity, which has stalled over the past decade.
Then there is the challenge of increasing female participation. Did you know that the largest untapped pool of labour in Australia is women aged 22 to 44, the key childbearing years?
Australia ranks a lowly 20th in the OECD for workforce participation for women aged between 25 and 45.
In addition, these women make up what is now called the ‘sandwich generation’ of carers – caring for young children, older children with a disability and elderly, frail parents.
These women are among the most skilled and experienced workers in the labour market, yet their participation in employment is restricted by their ability to balance paid work and caring responsibilities It seems a no-brainer that if we want to increase labour force participation – and as a result of that, economic output – then we need to retain these women in the workforce, and that requires government and employer policies that support combining work and family.
Workforce participation can also be assisted through the tax and transfer system. It’s widely recognised that the interaction of the personal income tax system and the transfer system can result in disincentives for some people to take part in paid work.
High effective marginal tax rates are a major barrier to participation – but the Henry Review’s two-step tax system is not necessarily the answer.
Finally, there is the role of enterprise bargaining in driving genuine productivity improvements in the workplace.
A decade of attacks on collective bargaining by the Howard Government failed to achieve any great leaps in productivity.
The reality is that productivity improvements flow from collective bargaining because of the improvements in workplace culture that flow from making the agreement.
If a good agreement is made, with guaranteed pay increases, a strong dispute resolution mechanism, and a legitimate voice for workers and unions in the business, then employees have a tangible demonstration of trust from their employer, which in turn they can be confident to reciprocate.
That’s the way bargaining can drive productivity improvements – not through cutting costs, or extracting ‘offsets’ for every extra dollar paid out in wages — but in the employer and unions making a demonstrable commitment to fairness at the workplace.
Thank you for your time. I’m looking forward to continuing this discussion in the panel session.