Life on edge as new divide ignored

The Fair Work Commission’s recent wage review may have struck an increased pay deal for low-paid workers but its decision overlooks the growth of a worrying new divide in the Australian workforce.

With the rise and rise of the insecure worker, the issue has become less about adequate safety nets and more about the power relationship between employee and employer, the way that shapes the work contract, and the increase in a ‘disposable worker’ syndrome.

But while an ACTU campaign is trying to draw attention to insecure work growth, the development of a ‘core’ and ‘periphery’ workforce has largely been ignored.

Waging war

There are about 1.5 million low-paid workers who rely on the Fair Work Commission’s Annual Wage Review to protect their living standards: almost one in six of Australia’s 9.5 million employees. Many do not belong to unions but the ACTU represents their interests to the commission’s minimum wage panel.

This year, the ACTU argued for a $30 per week increase, while employers - through the Australian Chamber of Commerce and Industry - argued for a $5.80 increase. The Fair Work Commission awarded a $15.80 increase – worth roughly 2.6% – and reiterated that any casual employee not covered by an award or collective agreement should receive an additional loading of 24%.

However, while the Annual Wage Review focuses on the economic needs of the very low paid, I would argue that it does so within a framework that is heavily grounded in the idea that most low-paid workers are permanent, full-time employees.

In fact, the opposite is true.

Core of the issue

During 2011 and 2012, I chaired the Independent Inquiry into Insecure Work. The results, Lives on Hold: Unlocking the Potential of Australia’s Workforce, were presented to the ACTU congress last year.

In that report, I argue that the Australian workplace divide is no longer between the blue-collar and white-collar worker, or between the private and public sectors. Instead, over recent decades, it has become a divide between 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 or possessing skills for which there is a 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 to secure part-time arrangements. Periods of unemployment are short or voluntary.

And then there are those on the periphery. They are employed in various insecure arrangements – casual, fixed-term contract, labour-hire companies – earning low wages and enjoying few, if any, broader entitlements such as paid leave.

Many do not know what hours they will work from week to week and often juggle multiple jobs in an attempt to earn what they need. If their skills are low or outdated, they are rarely offered training through work. They may shift between periods of unemployment or underemployment, effectively destroying their ability to save money. Their work is not a career – rather it is a series of unrelated temporary arrangements, with a constant struggle to maintain enough income to pay for rent, bills and food.

For those on the periphery, ‘flexibility’ means 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.

Employers have always exercised authority over workplaces, but in the new economy the stronger focus on flexibility and innovation is resulting in greater rewards and power for ‘the self-programmable’ worker, who is able to process information into specific knowledge. Meanwhile, the less skilled and unskilled possess far less control over their jobs.

Lack of scrutiny

Unfortunately for those who find themselves in this position, the development of the core-and-periphery workforce has attracted little scrutiny. Despite growing interest and research by academics, it has slipped under the radar of our political class.

It’s therefore heartening to see the ACTU leading a campaign against the growth of insecure work. Importantly, the unions’ campaign is built around stories about the real experience of work today, not unlike those we heard again and again during our inquiry – workers who can’t get a loan or who struggle to make time to be with their family because of the precarious nature of their working arrangements.

Narrow view

Increasing polarisation in the workforce follows from and reinforces a narrow definition of the desired ‘skills’ that make workers attractive to employers looking to hire, as opposed to broader strategies that might strengthen workforce capability.

As our inquiry found, the issue is less about having an adequate safety net and more about employers having a narrow view of our workforce potential, leading to an unwillingness to invest in people. The recent debate over the misuse of 457 visas by some employers reinforces this point.

It is obvious that Australia needs new and less hierarchical forms of work organisation if we are to get the most from our workforce. This will also require more inclusive strategies designed to increase workforce potential.

The alternative is more of the same: a “disposable worker” syndrome that undervalues the potential of our greatest asset - our people.

Brian Howe chaired the 2012 Independent Inquiry into Insecure Work, established by the ACTU. He was deputy prime minister in the Keating Labor government between 1991 and 1995.