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  • Employers Steal More than 280 Hours from Workers Each Year: Go Home on Time Day Report 2023

    That’s the finding of the Australia Institute’s 2023 report, Short Changed, tracking annual work hours and unpaid overtime for Go Home On Time Day on November 22. It has also found the average worker is losing out on $11,055 a year, or $425 a fortnight, to unpaid overtime.

    Key findings:

    The Australia Institute surveyed 1,640 people between August 29 and September 6. Of those, 61% were in paid work.

    • Employees reported doing an average of 5.4 hours of unpaid work a week overall
      • Full-time employees perform an average of 6.2 hours, and casuals or part-timers four hours
      • Workers aged 18 to 29 do the most unpaid overtime (7.4 hours) a week
    • This ‘time theft’ equates to 281 hours a year or seven standard 38-hour weeks spent working for free
    • Australian employees are losing a cumulative $131 billion to unpaid work a year
    • Nearly half (46%) are not satisfied with the amount of paid work they’re doing and either want more or fewer hours:
      • A third of all workers want more paid hours (35%), but this rises to 54% for under-30s
      • Half of casuals (49%) of two in five part-timers (40%) would like more paid hours
      • Another 11% of all workers would like fewer paid hours

    “This survey shows just how uneven the labour market is. We’ve got many workers, especially casuals in insecure jobs, wanting more hours. At the same time, employers are more likely to demand long hours, including large amounts of unpaid overtime, from full-time workers,” Dr Fiona Macdonald, Policy Director, Industrial and Social at the Centre for Future Work said.

    “Record-low unemployment should have pushed both satisfaction with working hours and paid hours higher as employers scrambled to fill labour shortages. Instead, ‘time theft’ has actually blown out by 57 hours per worker since 2022 and has returned to near pandemic-era levels.

    “This dispels simplistic arguments that workers have the upper hand on employers because of recent industrial relations reforms. In fact, we’ve seen workers agree to more hours due to the cost of living crunch. Perversely, this has resulted in employees giving their bosses a free kick because many of those hours end up being unpaid.

    “Providing more protections for workers in these insecure positions, as proposed in the Closing Loopholes legislation currently before parliament, is an important priority for improving Australian labour market outcomes.”

    Visit Go Home On Time Day 2023 to read more and use our online calculator to work out your unpaid overtime.

    The post Employers Steal More than 280 Hours from Workers Each Year: Go Home on Time Day Report 2023 appeared first on The Australia Institute's Centre for Future Work.

  • After two years of profit-led inflation, workers deserve the pay rises they are getting

    The latest wage growth figures showed that workers’ wages for the past six months have grown faster than inflation. As Labour Market Policy Director, Greg Jericho writes in his Guardian Australia column, this should be celebrated. We need to shed our fear of wage rises. For too long any sign of increasing wage growth has been viewed as something to be stomped on while ever-increasing corporate profits have been cheered.

    Since the start of the pandemic, workers’ purchasing power has crashed, and the only way to recover the lost real wages is through wages increasing faster than inflation.

    The 1.4% growth of private-sector wages in the September quarter was driven largely off the back of the Fair Work Commission’s decision to increase Award wages by 5.75% and the decision to give aged-care workers a 15% pay rise.

    As a result around 40% of those who gained a pay rise in the September quarter received one greater than 4%.

    One other pleasing sign has been the relaxation of public sector wage caps has allowed those workers around the country to get a fairer pay rise, but their increases remain well below that of the private-sector.

    The profit-led inflation since 2021 hurt workers, and it now is only fair that they receive some recompense. After a decade of ever falling wage growth and a pandemic and recover that smashed real wages, it is very good news that workers are finally getting their fair reward.

    The post After two years of profit-led inflation, workers deserve the pay rises they are getting appeared first on The Australia Institute's Centre for Future Work.

  • The Government needs to act on Stage 3 as the RBA warns about wealthy households spending

    The Reserve Bank’s decision to raise interest rates on Tuesday lacked any clear reasoning.

    When compared with other periods such as during the mining boom, when household spending was growing fast and real wages were surging, we can see that the economy at the moment is much weaker. Households are now cutting back on luxuries as their real wages fall.

    But the RBA pointed out that one group of Australians are doing OK – those with high income and wealth. Those with large savings buffers and who are also enjoying the increased wealth from rising house prices are still spending.

    This is also the group who are about to be handed the biggest income tax cut in history. The Reserve Bank has made it clear that allowing Stage 3 to go forward in its current form will only fuel inflation and likely result in higher interest rates for all.

    With a Reserve Bank desperate to use any excused to raise rates and slow the economy even as it already slows, the Government needs to amend the Stage 3 cuts to deliver greater benefit to low-middle income households who have suffered the most from the rising cost of living and interest rates, and less to those who are already doing well and for whom a potential $9,075 tax cut would just put more fuel on the inflation fire.

    The post The Government needs to act on Stage 3 as the RBA warns about wealthy households spending appeared first on The Australia Institute's Centre for Future Work.

  • When the prices of necessities are rising fast, the RBA does not need to hit households with another rate rise

    In the past week, the likelihood of the Reserve Bank raising the cash rate to 4.35% has gone from about 20% prior to last week’s inflation figures coming out, to now an even-money bet.

    But when you look at the cost of living figures out this week it is clear that households are already having to reduce their spending on non-discretionary items.

    Out of the 14 biggest contributors to inflation, 10 were non-discretionary items.

    At this point we should note the comments of the secretary of the Treasury, Steven Kennedy, last week in Senate estimates. He was asked about the pathway to a “soft landing” – ie where inflation falls without us going into a recession.

    He noted that chances of a soft landing were made harder by recent rises in oil prices because “on the one hand, it will increase headline inflation by raising petrol prices. On the other hand, it may well reduce growth and see other prices fall because people have less to spend. At least in the short term, expenditure on petrol is not very discretionary.”

    When the prices of things you can’t avoid paying for rise faster than others, then that obviously reduces your ability to spend elsewhere. In this way petrol, electricity and rental price rises have the same impact as do interest rate rises.

    The most recent figures of the volume of retail spending will come out tomorrow, but we know that the volume has been falling, and is now back to pre-pandemic trend levels:

    This of course is what you would expect – when the cost of non-retail items such as petrol, mortgages, rents, electricity, property rates, medical services and insurance are rising, you are going to buy less in the shops.

    Since March last year the cost of mortgages has gone up 114%. Does the Reserve Bank think households haven’t really noticed that?

    Even you if discount the record low rates during the pandemic, the cost of mortgages is now about 70% higher than it was at the end of 2019. Since then, wages have risen only about 10.5%.

    Another rate rise is not going to do anything other than add to the cost of necessities. It would not so much reduce inflation as increase the cost of living and hit households whose wages and incomes continue to be worth less than they were a year ago.

    The post When the prices of necessities are rising fast, the RBA does not need to hit households with another rate rise appeared first on The Australia Institute's Centre for Future Work.

  • The Reserve Bank should not raise rates on Melbourne Cup Day

    The latest CPI figures showed inflation grew 5.4%, down from 6% in the June quarter and almost a third below the peak of 7.8% at the end of last year. And yet commentators seem desperate for the Reserve Bank of Australia to raise interest rates next month to show it is tough on inflation. But raising rates now would not be tough, it would just be cruel.

    The annual growth of inflation is falling quite quickly – down from 7.8% at the end of last year. But because the quarterly growth of inflation rose in the September quarter, a numbe rof commentators and economists have been suggesting that the Reserve Bank should raise interest rates in two months.

    But when you examine the drivers of inflation in the September quarter, there is little that would have an impact from higher interest rates.

    Automotive fuel prices accounted for 20% of the growth in inflation in September – that is completely unaffected by rate rises given that it was all due to higher world oil prices due to OPECD restricting supply. Similarly rental prices, electricity, property rates and charges, insurance, tobacco and beer prices have nothing to do with interest rates. Even the cost of building a new home is driven mostly by the increased cost of construction materials from overseas.

    Crucially in the September quarter the cost of “non-discretionary item” rose 1.4% while the cost of “discretionary” item rose just 0.7%. Non-discretionary items are things which you cannot avoid paying (at least in the short-term). In effect those price rises have the same impact on consumer spending as do rate rises – they reduce the ability of people to spend money on things in shops and on discretionary services.

    Had the RBA raised interest rates more in the September quarter there would have been negligible impact on the main drivers of inflation, raising them in November due to these latest figures would just be cruel and hurting people whose real wages continue to fall.

    The post The Reserve Bank should not raise rates on Melbourne Cup Day appeared first on The Australia Institute's Centre for Future Work.

  • Australia is an energy super power, we need to use that power for good

    As the Australian Government continues to pursue policies notionally designed to reduce our greenhouse gas emissions, a great store has been placed in Australia becoming a “renewable energy superpower”. However as Labour Market and Fiscal Policy Director, Greg Jericho, notes in his Guardian Australia column, Australia already is an energy superpower. But we fail to use that power for good.

    Australia is either the world’s largest or second-largest exporter of metallurgical coal, thermal coal and LNG. And yet we have not sought to use this power to pursue policies that would reduce demand for fossil fuels and transition the world towards renewable energy. Instead, we placate mining companies and give no timeline to end coal and gas use. We continue to approve new coal mines and fail to insert a climate-change trigger into environment protection legislation that determines whether new mines can be approved.

    Given September this year was the hottest September on record, after August this year being the hottest August on record, July this year being the hottest July on record and June this year being the hottest June on record, the time for action that reduces Australia’s and the world’s emissions is urgent and critical.

    Climate change is one area where Australia can legitimately take a leading role in global affairs, our power as an energy producer and supplier of fossil fuels which continue to exacerbate climate change demands we show this leadership.

    For too long Australian governments have cowered before mining companies, now it’s the time to realise we have the minerals they want now and in the future when renewable energy becomes the dominant power and thus we can dictate terms.

    Leadership requires the grasping of power and using it for good.

    The post Australia is an energy super power, we need to use that power for good appeared first on The Australia Institute's Centre for Future Work.

  • Submission: Fair Work Amendment (Closing Loopholes) Bill 2023

    Submission supporting the Closing Loopholes Bill 2023.

    Authors: Macdonald, Peetz, Stanford

    Download the full report.

  • The latest report from the IMF highlights the need for full-employment

    The IMF’s latest World Economic Outlook is mostly framed around trying to thread the needle of reducing inflation and cost of living rises and not crashing the economy while doing so.

    And while overall the IMF suggests the world economy is in for a “soft landing” the picture it paints for Australia is of a tough year ahead. Policy director Greg Jericho notes in his Guardian Australia column that the IMF has downgraded its expectation for growth next year from an already bad 1.7% to a historically awful 1.2%.

    Were Australia’s economy to grow this slowly through the year and avoid a recession it would be the first time that has happened. The IMF also predicts that 2025 will grow by just 2.0%. Were that to occur, it would be the first time on record that Australia’s economy has gone 3 consecutive calendar years without growth above 2%. That is hardly a “soft landing”

    The IMF also now predict unemployment will rise quicker than it expected would be the case in its previous outlook in April.

    The report highlights the need for the government and the Reserve Bank to work to deliver full employment. The current settings have the nation on course to grow so slowly for so long that the risk of the economy stalling are rising precipitously.

    The post The latest report from the IMF highlights the need for full-employment to be the aim of the government and the Reserve Bank appeared first on The Australia Institute's Centre for Future Work.

  • Insecure work is a feature of our labour market. New laws can change that.

    Chris Wright is Associate Professor in the Discipline of Work and Organisational Studies at the University of Sydney, and a member of the Centre for Future Work’s Advisory Committee. This commentary is based on his submission to the Senate Education and Employment Legislation Committee’s inquiry into the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, and originally appeared in the Sydney Morning Herald.

    * * * * *

    The Senate has started reviewing the Australian Government’s Closing Loopholes Bill. If passed, this legislation will allow minimum standards to be set for contract workers, provide stronger penalties against employers who commit wage theft and deter employers from outsourcing to circumvent enterprise bargaining.

    These measures will strengthen protections for workers who often face barriers to job security and career development.

    Australia’s current system of workplace laws was adopted at a time when enterprise bargaining and awards covered a larger share of the workforce than today. Enterprise bargaining and awards encourage employers to invest in their workers through “standard” employment arrangements underpinned by permanent contracts, decent wages and training.

    These arrangements promoting workforce investment benefit both workers and employers. Workers gain job and economic security and career progression opportunities. Employers gain loyal and satisfied workers who contribute to productivity and innovation. As the architects of the current system of workplace laws envisaged, workforce investment thus provides the basis for high-productivity business strategies, which help to make the Australian economy more internationally competitive.

    Recently, however, more businesses have opted for a different course. These businesses have tried to compete not through high-productivity strategies but instead by undercutting or evading workplace laws and by engaging workers via “non-standard” arrangements such as casual contracts or via gig economy platforms.

    The rising incidence of wage theft in which employers pay workers below their legal entitlements is evidence of this undercutting. The growing numbers of workers hired through labour hire arrangements, which some businesses have used to avoid their enterprise bargaining obligations, is evidence of evasion. So too is the emergence of gig platforms exempt from workplace laws.

    Wage theft, gig platforms and use of labour hire as an evasion tactic have become features of Australia’s modern labour market. None of these features existed when the foundations of the current system of workplace laws were first laid in the 1990s.

    As the nature of work and the labour market evolves, workplace laws must adapt in response. The Closing Loopholes Bill recognises this by allowing workers on casual contracts to convert more easily to permanent contracts, increasing protections for gig and labour hire workers and introducing new measures against employers who undercut wage laws.

    While non-standard workers have flexibility, they have little job and economic security under current laws. For instance, casual workers receive a higher hourly pay rate as compensation for this insecurity but are concentrated in the lowest-paid industries. Like their counterparts in the gig economy, casual workers are less likely to receive training than permanent workers.

    The proposed change to give casuals who work regular hours the right to convert to permanent employment will probably improve their access to good quality jobs and career development opportunities.

    Business groups have criticised the Closing Loopholes Bill for its supposedly negative impacts on productivity and innovation. They have not offered evidence supporting these claims. To the contrary, research evidence suggests that measures promoting standard employment are more likely to encourage businesses to compete through high-productivity and innovation-enhancing strategies rather than by undercutting or evading.

    Winston Churchill once said that without effective workplace laws, “the good employer is undercut by the bad and the bad by the worst… Where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration”.

    Workers in Australia are increasingly missing out on legal protections under current laws. The research evidence suggests the Closing Loopholes Bill’s provisions are necessary to avoid a situation like the one Churchill described.

    The post Insecure work is a feature of our labour market. New laws can change that. appeared first on The Australia Institute's Centre for Future Work.

  • Inflation remains headed in the right direction despite higher oil prices

    The latest monthly CPI figures out on Wednesday showed a slight increase in the annual growth of inflation, but policy director Greg Jericho writes in his Guardian Australia column that the Reserve Bank should not use it as an excuse to raise rates next week.

    While CPI rose from 4.9% to 5.2%, the monthly figures can be quite erratic and thus it is best to also take note of the measure that excludes volatile items and holiday travel (which can exaggerate movement son a monthly basis). On this measure, annual inflation feel from 5.8% to 5.5%.

    The big driver of inflation in August was a 9% jump in automotive fuel prices. And indeed much of the inflation over the past 2 years has come from overseas increases in world prices of commodities and of course companies taking advantage to increase profit margins.

    The latest figures show that once again there is very little that the RBA can do to limit these price rises. While a higher exchange rate might ameliorate some of the increases, it is always foolish for the RBA to attempt to increase the value of the dollar by raising interest rates. Any changes in the value of the exchange rate due to another rate rise would likely be small and temporary.

    The new Governor of the RBA, Michele Bullock should recommend the RBA board look through the monthly movements of the CPI and note that inflation here is following largely the same path as that in the rest of the OECD. Raising rates now would only serve to punish households for an increase in prices that had no link with wages or the level of demand in Australia economy.

    The post Inflation remains headed in the right direction despite higher oil prices appeared first on The Australia Institute's Centre for Future Work.