My Blog

Author: Jim Stanford

  • Rebuilding Vehicle Manufacturing in Australia (EVs)

    Global automotive manufacturing is rapidly transitioning to the production of Electric Vehicles (EVs) in line with technological advancements and the global community’s commitment to addressing climate change. This transition presents an enormous opportunity for Australia to rebuild its vehicle manufacturing industry, taking advantage of our competitive strengths in renewable energy, extractive industries, manufacturing capabilities, and skilled workers.

    Australia possesses many of the crucial elements for an EV manufacturing industry: rich mineral reserves, an advanced industrial base, a highly skilled workforce, and consumer interest. But what it lacks is an overarching, coordinating and strategic national industry policy. Global experience shows that this is central to EV-oriented industrial transformation. Australia can play an important role in global EV manufacturing industries but developing a strategy to realise this will require active government policy responses to both the challenges and opportunities at hand.

    Australia’s natural resource endowments and industrial capabilities make EV industry development a viable economic and social strategy. Our moral obligations to create a sustainable future make it essential public policy. This report illustrates how Australia can rebuild a vehicle manufacturing industry, on a sustainable ecological foundation, and meet our international environmental obligations. The report covers several important related dimensions of the issue:

    • How an EV manufacturing strategy can add value to Australia’s existing exports of primary resources – connecting them to innovative, sustainable manufacturing industries;
    • Developing supply and value chain linkages to the global EV industry by increasing the capability for innovation and advanced manufacturing amongst small and medium-sized enterprises;
    • The central role of Australia’s education systems in delivering sustainable industry-focused training and skills development, to provide workers with career pathways shaped by lifelong access to education and learning;
    • How active government intervention can coordinate economic sectors in an innovative and strategically oriented industry policy driving sustainable economic and technological transformation; and
    • Understanding the importance of automotive manufacturing to our industrial future, its role in redesigning transport systems, investing in new technology and gearing production systems to meet social and environmental requirements.

    To make the case for a national EV manufacturing policy, this paper reviews existing literature and presents relevant data to show that an EV industry in Australia is not just desirable – but it can also lead the sustainable transformation of Australia’s economy.

    The paper is arranged as follows. The next section provides an overview of the Australian national EV policy landscape and the international context, to identify trends and opportunities in EV manufacturing.

    The bulk of the paper is then dedicated to reviewing four key ‘Building Blocks’ of an industry policy: the resources sector, skilled labour, supply chain capabilities and capital assets, and the capacity of government to develop a policy response that assembles these key elements as the foundation for rebuilding Australian manufacturing with EVs at the centre.

    In mapping this foundation of an EV manufacturing policy, the subsequent section cautions that an EV industry is not a panacea for addressing the broader climate crisis and creating a sustainable economy. It argues, however, that a sustainable EV industry should be considered as a major driver of industrial transformation alongside other positive cultural and environmental changes within Australian society.

    The conclusion summarises the paper’s overarching theme that Australia can build a strong EV manufacturing industry with the right policy settings and government actions. It makes several specific recommendations to get the ball rolling on developing these settings – including recommendations touching on industry planning, energy requirements, consumer demand, resource use, supply chain developments, skills and training, and government support.

    The post Rebuilding Vehicle Manufacturing in Australia appeared first on The Australia Institute's Centre for Future Work.

  • Of 3’s, and Other Important Labour Market Numbers

    Prime Minister Scott Morrison set tongues wagging this week with a confident pledge that Australia’s unemployment rate could have “a 3 in front of it” this year. It’s a theme that will loom large in his campaign for reelection later this year.

    In this commentary, Centre for Future Work Director Jim Stanford considers whether a low unemployment rate is an accurate indicator of the state of the labour market — and whether, even if achieved, it would reignite wage growth and solve other problems holding back Australia’s labour market.

    The unemployment rate was 4.2% in December, so Mr Morrison’s prediction may not be as brave as might seem: it would only take a .3-point drop to achieve that magical ‘3’. The official unemployment rate often bounces by more than that (in either direction) in any given month, purely due to measurement errors or shifts in recorded labour force participation. So his prediction will likely come true. But is it the economic triumph that he and his political allies will claim?

    A lower unemployment rate is obviously better than a higher unemployment rate. But the unemployment rate itself has lost much of its value as an indicator of the state of the labour market. There are large pools of unutilised and underutilised labour in our economy that are not captured by the official unemployment measure.

    Equally important, assumptions that a historically low unemployment rate will automatically correct many of the labour market problems that Australia has experienced in recent years are misplaced. Problems like wage stagnation, falling real wages, income inequality and poverty (even among employed people), and the economic exclusion of sectors of society (such as indigenous and immigrant communities, and people with disability) all require more concerted and targeted actions to fix.

    Please see Jim’s full commentary: Of 3’s, and Other Important Labour Market Numbers.

    The post Of 3’s, and Other Important Labour Market Numbers appeared first on The Australia Institute's Centre for Future Work.

  • Centre for Future Work Announces Two Senior Appointments

    Greg Jericho will join the Centre on 1 February as Policy Director: Labour Market and Fiscal. Greg is an economist and well-known columnist for The Guardian in Australia; he currently teaches at the University of Canberra. He will continue writing his Guardian column, while overseeing new research projects for the Centre on issues of employment, wages, insecure work, and related topics.

    Dr Fiona Macdonald will join the Centre on 1 March as Policy Director: Industrial and Social. Fiona is presently Vice-Chancellor’s Senior Research Fellow at the School of Management, RMIT University, and an internationally recognised expert on caring labour, gender and work, and industrial relations policy. She has published extensively on the Awards system, working conditions and compensation in human and caring services, and violence at workplaces. Fiona will oversee new research at the Centre on industrial relations reform, social policy, and caring labour.

    The two Policy Directors join the Centre’s existing research team, which includes: Economist and Director Jim Stanford; Senior Economist Alison Pennington; Economist Dan Nahum; and Mark Dean, Distinguished Research Fellow at the Carmichael Centre.

    “This is a critical moment in the history of work and industrial relations in Australia,” said Dr Stanford, the Centre’s Director. “The addition of Greg Jericho and Fiona Macdonald to our team will greatly enhance our capacity to investigate the threats facing work and workers, and to develop progressive policy responses that could achieve a better future of work.”

    “I am very excited to join the Centre for Future Work,” said Jericho. “At such a crucial moment, being able to push the policy debate in the interests of fairness for workers is of utmost importance. I look forward to working with the great team at the Centre and the Australia Institute to continue producing quality research that leads the political and policy debates.”

    “As a long-time admirer of the Centre, I am thrilled to be joining its research team,” said Dr. Macdonald. “I look forward to contributing to the Centre’s important work, including in the vital areas of the care economy and gender equality. Work is changing rapidly, and the Centre’s research empowers those working for a fairer, more equal labour market.”

    Greg Jericho will work out of the Australia Institute’s central office in Canberra. Fiona Macdonald will be based in Melbourne.

    Greg Jericho can be followed on Twitter at @GrogsGamut. Fiona Macdonald can be followed at @DrFionaMac.

    The post Centre for Future Work Announces Two Senior Appointments appeared first on The Australia Institute's Centre for Future Work.

  • Snatching Defeat from the Jaws of Victory: Labour Market Implications of Australia’s Failed COVID Strategy

    The resulting surge in infections has been among the worst in the industrialised world (worse than the U.S. now, as shown in the following graph from Our World in Data). The implications of this massive outbreak for work, workers, production, and the economy have been as predictable as they are devastating. One-third or more of workers in the most-affected regions cannot attend work: because they contracted COVID, were exposed to it, or must care for others (like children barred from child care and soon, possibly, schools).

    Our Centre for Future Work team has been active in highlighting the risks of ‘letting it rip’, analysing the failures of isolation and income support programs, and reminding everyone that keeping workers healthy must be the first priority in keeping the economy healthy. Here is a selection of our recent interventions:

    New COVID Cases per Million (7-day rolling)

    • Our Director Jim Stanford reminded policy-makers in this commentary in The Conversation that human labour is the critical input to production at all stages of value-added and supply chains, and if policy-makers acknowledged the centrality of work to the economy they would not have made such destructive choices. The article was reposted by the ABC, the Sydney Morning Herald, and other platforms, and viewed over a half-million times.
    • Senior Economist Alison Pennington has exposed the flaws in government isolation and testing systems. For example, she highlighted the perverse incentives created by the NSW government’s punitive $1000 fine for failing to register a positive RAT test — never mind the governments’ failures to make tests available, and support workers (with necessary income benefits) to isolate. Her analysis was shared thousands of times, and featured in multiple news coverage (including News.com, The New Daily, and Yahoo Finance) of the flawed NSW policy.
    • Alison further detailed the flaws in changes to the Commonwealth government’s isolating support payments, in this commentary in The New Daily. By punitively excluding hundreds of thousands from isolation benefits, the policy will accelerate contagion and make supply chain problems even worse down the road.
    • Our experts have been featured in numerous other reports on the supply chain problems arising from the Omicron surge, including these reports on Channel 10, Today, The Age, ABC Online, and The Guardian.
    • Our Economist Dan Nahum linked the surge in Omicron contagion to the spread of insecure work arrangements in Australian workplaces. And the Centre’s previous work on how COVID has accentuated the dominance of casual and insecure work in Australia’s labour market shows that without urgent action to improve job quality, the labour market will be even more vulnerable to the inevitable future disruptions from this continuing crisis.

    Our team of experts will continue monitoring the dangerous labour market developments arising from Omicron, and flawed government responses to it. Please watch our site and follow our Twitter feed for regular updates.

    The post Snatching Defeat from the Jaws of Victory: Labour Market Implications of Australia’s Failed COVID Strategy appeared first on The Australia Institute's Centre for Future Work.

  • Healthy humans drive the economy: witnessing one of the worst public policy failures in Australia’s history

    Ask chief executives where value comes from and they will credit their own smart decisions that inflate shareholder wealth. Ask logistics experts how supply chains work and they will wax eloquent about ports, terminals and trucks. Politicians, meanwhile, highlight nebulous intangibles like “investor confidence” – enhanced, presumably, by their own steady hands on the tiller.

    The reality of value-added production and supply is much more human than all of this. It is people who are the driving force behind production, distribution and supply.

    Labour – human beings getting out of bed and going to work, using their brains and brawn to produce actual goods and services – is the only thing that adds value to the “free gifts” we harvest from nature. It’s the only thing that puts food on supermarket shelves, cares for sick people and teaches our children.

    Even the technology used to enhance workers’ productivity – or sometimes even replace them – is ultimately the culmination of other human beings doing their jobs. The glorious complexity of the whole economy boils down to human beings, using raw materials extracted and tools built by other human beings, working to produce goods and services.

    A narrow, distorted economic lens

    The economy doesn’t work if people can’t work. So the first economic priority during a pandemic must be to keep people healthy enough to keep working, producing, delivering and buying.

    That some political and business leaders have, from the outset of COVID-19, consistently downplayed the economic costs of mass illness, reflects a narrow, distorted economic lens. We’re now seeing the result – one of the worst public policy failures in Australia’s history.

    The Omicron variant is tearing through Australia’s workforce, from health care and child care, to agriculture and manufacturing, to transportation and logistics, to emergency services.

    The result is an unprecedented, and preventable, economic catastrophe. This catastrophe was visited upon us by leaders – NSW Premier Dom Perrotet and Prime Minister Scott Morrison in particular – on the grounds they were protecting the economy. Like a Mafia kingpin extorting money, this is the kind of “protection” that can kill you.

    NSW Premier Dominic Perrottet’s decision to relax COVID-19 restrictions in December has turned into both a health and economic disaster. Bianca De Marchi/AAP

    Effect as bad as lockdowns

    On a typical day in normal times, between 3% and 4% of employed Australians miss work due to their own illness. Multiple reports from NSW indicate up to half of workers are now absent due to COVID: because they contracted it, were exposed to it, or must care for someone (like children barred from child care) because of it. With infections still spreading, this will get worse in the days ahead.

    Staffing shortages have left hospitals in chaos, supermarket shelves empty, supply chains paralysed. ANZ Bank data, for example, shows economic activity in Sydney has fallen to a level lower than the worst lockdowns.

    Spending in Sydney and Melbourne now near lockdown conditions

    ANZ Research

    If relaxing health restrictions in December (as Omicron was already spreading) was motivated by a desire to boost the economy, this is an own-goal for the history books.

    Relaxing isolation rules

    Now the response to Omicron ravaging labour supply is to relax isolation requirements for workers who have contracted, or been exposed to, COVID-19.

    The first step was to shift the goalposts on “test, trace, isolate and quarantine” arrangements by redefining “close contact”.

    On December 29 the Prime Minister said it was important to move to a new definition “that enables Australia to keep moving, for people to get on with their lives”. The next day National Cabinet approved a definition such that only individuals having spent at least four hours indoors with a COVID-infected person needed to isolate.

    Australians certainly want supply chains to keep moving. That won’t happen by simply pretending someone with three hours and 59 minutes of face-to-face indoor contact with Omicron is safe. Putting asymptomatic but exposed and potentially infected people back to work will only accelerate the spread.

    The second step has been to reduce the isolation period for those who do pass this tougher “close contact” test. At its December 30 meeting National Cabinet agreed to a standard isolation period of seven days (ten days in South Australia), down from 14 days.

    For “critical workers” in essential services including food logistics, the NSW and Queensland governments have gone even further, allowing employers to call them back to work so long as they are asymptomatic.

    Snatching defeat from the jaws of victory

    This follows a US precedent, despite scientific evidence indicating contagion commonly lasts longer than 5 days.

    Employers will use this change to pressure exposed and even sick workers to return to work, risking their own health, colleagues, customers, and inevitably spreading the virus further.

    Copying US COVID protocols only guarantees US-style infection rates. In fact, since 5 January, Australia’s seven-day rolling average infections per million now exceed that of the US.

    Our Wold in Data, CC BY

    From one of the best COVID responses in the world to one of the worst, Australia has snatched defeat from the jaws of victory.

    It’s not too late to limit the carnage

    The idea that health considerations had to be balanced with economic interests was always a false dichotomy. A healthy economy requires healthy workers and healthy consumers.

    The Omicron surge has created an economic emergency that will be difficult to endure.

    But it’s not too late to limit further avoidable contagion. Infection prevention practices (including masks, capacity limits, prohibitions on group indoor activities, PPE and distancing in workplaces, and free and accessible rapid tests) must be restored and enforced.

    Income supports for workers who stay home must be restored. Staffing strategies need to emphasise steady, secure jobs, rather than outsourcing and gig arrangements which have facilitated contagion.

    Above all, our policy makers need to remember the economy is composed of human beings, and refocus their attention on keeping people healthy. Protecting people is the only thing that can protect the economy.

    The post Healthy humans drive the economy: we’re now witnessing one of the worst public policy failures in Australia’s history appeared first on The Australia Institute's Centre for Future Work.

  • New International Research: Australia’s Missed Wage-boosting Opportunities

    International comparison of wage-boosting policies Australia has not adopted.

    Authors: Stanford et al.

    Download the full report.

  • Putting a Cap on Community: Victoria’s Rate Caps (VIC)

    The Victorian Government’s policy of capping of local government rates revenue in Victoria is a regressive move on economic, social and democratic grounds. By arbitrarily tying the growth in total rates revenue in each local government area to price indexes, the state government restricts the ability of local governments to respond to the COVID-19 crisis with expanded, secure employment and service offerings.

    Rates on property are the largest single source of revenue to local governments in Victoria. Of total Victorian local government revenue in 2019-20 ($11.7 billion), rates accounted for $5.6 billion or almost half. Since 2016-17, the Victorian state government has capped the amounts local governments can collect from their ratepayers.

    New research by the Centre for Future Work, commissioned by the Australian Services Union, finds that the imposition of rate caps has cost up to 7425 jobs in 2021-22, counting both direct local government employment and indirect private sector jobs. They have also reduced GDP by up to $890 million in 2021-22. The costs of suppressed local government revenues, and corresponding austerity in the delivery of local government services, will continue to grow with each passing year if the policy is maintained.

    The rate cap policy becomes more restrictive as the overall economy slows, since the rate cap is tied to inflation indexes which tend to slow when the economy is weak.

    The local government sector in Victoria employs about 50,000 people in a wide range of services and occupations, including road planning and maintenance, home and aged care, waste disposal, libraries, childcare, school crossing supervision, maternal and child health, the State Emergency Service, and environmental management.

    The rate caps act as a brake on recovery and growth by embedding a dynamic of self-fulfilling fiscal restraint and austerity. Additionally, there has been a shift to other forms of local government revenue-raising that are less progressive and socially equitable, such as fees and fines.

    Rates bills are calculated based on relative property valuations – so even if local governments are collecting less from rates overall than they would in the absence of the cap, growth in a particular ratepayer’s payments may well exceed the overall cap.

    The rate cap policy inhibits a normal trend of expanding and improving local government services in line with population growth, rising living standards, and economic expansion – as well as interfering with the democratically-expressed preferences of local government voters.

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  • International COVID-19 Income Supports: An Update

    In several countries, governments with stronger commitments to public health and safety, and a more inclusive and equitable recovery from COVID-19, have been more cautious and incremental in scaling back government interventions. Some have also made permanent improvements to income security and other policies whose shortcomings became more apparent during the pandemic. In Australia, however, the phase-out of COVID-19 wage subsidies and income supports was accelerated and premature – perhaps more so than any other major industrial country. A new comparison of COVID support policies across numerous industrial countries confirms the economic and public health risks of the rapid elimination of Australia’s COVID programs.

    This briefing paper, prepared by Alison Pennington and Jim Stanford, catalogues a selection of international income support measures introduced in response to the COVID-19 pandemic, and reports on recent changes in those programs as vaccinations roll out and economies have re-opened. This catalogue allows us to make a comparative assessment of the level and coverage of Australia’s provisions, in relation to other jurisdictions.

    After summarising the status of Australia’s Commonwealth-administered COVID-era payments, other countries are surveyed, organised into two groups: those with income support programs still in place, and those whose programs had been eliminated at time of writing. A conclusion summarises the comparison, which confirms that Australia has been an outlier among industrial countries in the speed with which emergency COVID-19 measures were eliminated.

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  • Working From Home, or Living at Work? (GHOTD 2021)

    2021 marks the thirteenth annual Go Home on Time Day (GHOTD), an initiative of the Centre for Future Work at the Australia Institute that shines a spotlight on overwork among Australians, including excessive overtime that is often unpaid.

    Last year’s report emphasised that 2020 had been extraordinary and difficult, and 2021 has brought little reprieve. Australia remains caught in ongoing and interacting twin crises: a public health crisis and an economic crisis. Each influences and reinforces the other.

    Around a third of employed Australians continue to perform at least some of their work from home. As a result, the standard scenario of workers ‘staying late at the workplace’, which largely framed our analysis of excessive work time before the pandemic, is now supplemented by a different dimension of excessive work and unpaid overtime. Now we must consider whether home work will become the “new normal” for many workers even after the acute phase of the pandemic finally passes – and what new pressures on working hours, work-life balance, and unpaid overtime are unleashed by the work-from-home phenomenon.

    Whether working from home or at a formal workplace, the problem of unpaid overtime (whereby workers are not paid for a significant portion of their work) continues to be severe. In fact, the estimated incidence of this ‘time theft’ has increased substantially compared with 2020. In many cases, people’s responsibilities in their home lives have increased in response to the health and social crisis, accentuating a double burden of unpaid work – one that is experienced disproportionately by women.

    Since 2009, the Centre for Future Work and the Australia Institute have commissioned an annual survey to investigate overwork and unpaid overtime in Australia. This year’s poll of 1604 Australians was conducted between 24 and 27 August, with a sample that was nationally representative according to gender, age and state or territory. Of the 1604 respondents, 1048 (or 65%) were currently in paid work.

    Our survey asked respondents about unpaid hours of work, preferences for more or fewer hours, family and caring responsibilities, and the balance between work and non-work life during COVID-19. This year’s survey also asked about electronic surveillance practices implemented by employers to monitor those working from home, and what workers thought about returning to the on-site workplace as the COVID-19 pandemic abates.

    This report summarises the results of that polling, and places it in the context of national labour force trends.

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  • Ideas Into Motion: Progressive Economics and Social Change

    Our Director, Dr. Jim Stanford, was recently asked to contribute his ideas on the links between progressive economics and real-world social change movements for a forthcoming collection: The Handbook of Alternative Theories of Political Economy, edited by Frank Stilwell, Tim Thornton, and David Primrose, forthcoming in 2022 from Edward Elgar Press in the UK.

    In the essay, Jim reflects on his own experiences trying to integrate progressive economic theorising and research with on-the-ground campaigns for economic, social, and environmental justice. While there is a natural synergy between progressive economics and social change organising, there are also challenges and barriers to more effective partnership between these two worlds. The essay proposes several ‘best practices’ that both researchers and activists can consider as they try to forge stronger cooperation.

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