Changes in the economy that hamper people's ability to move up the rungs of the workforce risk creating an underclass in the labour market, academics fear.
The so-called job quality has been in decline in Australia over the past decade if not more, with job security faltering, and the number of people unable to get enough for a stable income work on the rise. Adding to that, the industries that traditionally provided upward mobility such as manufacturing have been in structural decline.
"Job quality" is defined as employment that allows people to achieve a decent standard of living, with reasonable security, along with the prospects of progression and skills development through consistent work hours.
"There is potentially a bad jobs trap because there is a stripping out of the intermediate jobs — the manufacturing jobs — so it's difficult for people to move up,” said Professor Chris Warhurst at the University of Sydney Business School.
Concerns about a bad jobs trap come as the government set the goal to lift the average national income by $11,000 per person by 2025 through innovation, productivity gains and engagement with Asia, outlined in the Asian Century White Paper release over the weekend.
Academics agree that job quality rose from the 1960s as incomes increased alongside workplace security and rights. Job quality then declined beginning in the mid-1970s with the steep recessions and deindustrialisation in Western economies, which eroded the industries where the emphasis on job quality was strongest.
Yet in recent years academics are more divided about the quality of jobs being generated by the economy, with some researchers worrying poor productivity and mounting social problems are being exacerbated by lower quality employment.
Widening gap in quality
Since the 2000s, researchers see job quality at the top end of the spectrum increasing, while job quality at the bottom end worsening.
The polarisation is driven by multiple factors including the effects of new technologies, changes in the economy and globalisation. The internet and more powerful communications and computing technology, for example, has allowed fewer people to do more varied work.
At the lower end, however, the decline of manufacturing jobs has not been replaced by similarly high-paying jobs with clear paths for advancement that the industry used to produce. Instead, the industries employing the most people typically offer more irregular shifts and part-time work.
There were 1.1 million workers in manufacturing jobs in November 1984, which despite the economy's continuous growth over the past two decades, have fallen to 960,400 in trend terms according to the ABS. Over the same period, retail jobs have almost doubled from 683,600 to 1.21 million.
The shift has been more dramatic among health care and social assistance workers which have risen from 540,200 workers in November 1984 to 1.36 million in August 2012. Accommodation and food service workers numbered 327,200 in November 1984 and have since more than doubled to an industry 773,600-strong.
One-fifth of all casual workers in Australia are in retail, with another fifth in accommodation and food services, according to the Australian Council of Trade Unions's submission to the independent inquiry into insecure work in Australia earlier this year.
Adding to the clouded outlook for jobs, technology and globalisation has well-paying service sector jobs offshore, too, with 80,000 such positions moved overseas in the past four years.
To some degree, the changes in the bigger industries reflected the evolution of consumer tastes and regulation of businesses, said Australian Industry Group chief economist Julie Toth.
"Twenty and 30 years ago, retail shop hours were very heavily regulated and now they're not,” she said. “So that does increase the requirements of those businesses for part-time and casual work."
But the changes have created a class of casual workers, who whether from preference or necessity, hold jobs defined by the Australian Bureau of Statistics as “without paid leave entitlements”.
Figures from the ABS showed that there were 2.2 million casual workers, or 19 per cent, of the 11.4 million workers in the economy, roughly unchanged since the late 1990s.
The government's relaxation of work hours also came at a time when the focus on full employment as a policy goal had diminished not just in Australia but among many advanced economies, said John Buchanan of Director of the Workplace Research Centre at the University of Sydney.
“We've been living through a period of extended underemployment,” he said. "Although unemployment is down, underemployment has been high and rising.”
The so-called underutilisation rate, which comprises the jobless with those who are working but in need of more employment, was 12.4 per cent in August, according the ABS — more than double the official September jobless rate of 5.4 per cent.
“It's particularly pronounced in Australia because Australia has one of the highest levels of part-time work in the world,” said Mr Buchanan.
The International Labour Organisation calculates that part-time employment — which can include entitlements and is not necessarily "casual" — as a percentage of total Australia employment was near 25 per cent in 2010. While ranking behind the Netherlands and the UK, it's ahead of Japan with about 20 per cent, France, 18 per cent, and the US just over 10 per cent in the same period.
Another factor that has undermined wages is the decline of the unions linked to manufacturing, according to University of Sydney senior work and organisation structures lecturer Angela Knox.
“The union isn't involved to collectivise and protect wage levels like it would have been in past years," she said.
Two generations ago, full-time workers could also progress within organisation to higher levels and higher rates of pay with higher skills, she said. “There are fewer of those internal labour markets now so it's much more difficult for workers to progress in organisations and move into those higher levels and develop more skill and attract higher wages."
Split in wages and productivity
The pressure on workers in the lower rung of the economy can be seen in the split between wages and productivity over the past three decades, argues Workplace Research Centre's Mr Buchanan.
While labour productivity rose by almost 50 per cent in the 25 years to 2009, inflation adjusted wages rose just under 10 per cent, according to an analysis of ABS data from the Workplace Research Centre.
“Most of the benefit of productivity has been accrued by business,” said Mr Buchanan. “If we have insecurity it's because that growth hasn't been shared."
And the changes have a way of self-perpetuating in the “bad jobs” trap because for many companies there is little incentive to train part-time or casual workers, said the University of Sydney's Professor Warhurst.
In a troubling sign, half of all casual employees are “permanent casuals”, meaning they have "long-term, ongoing and regular employment" but with no basic entitlements, according to the ACTU's findings. More than half of casuals have been employed in the their current job for a year, with 15 per cent more than five years.
Professor Warhurst said Australia was better off than some countries, such as the US, because the minimum wage works fairly well but the problem of generating good paying jobs for a wider swathe of the workforce remained.
“Even if you have a decent minimum wage but you also need regular stable income," said Professor Warhurst. "So the trick then becomes [that] we want to create more good jobs are the top while finding ways of improving them at the bottom."