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Bad jobs trap looms for workers

A new website allows potential employees to easily access what a workplace is like before they go there.

A new website allows potential employees to easily access what a workplace is like before they go there.

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.

Extended underemployment

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."


  • How does this play out where we've been seeing private sector productivity rising over the past 10 years yet we've been seeing public service sector productivity falling. Public service sector have are much more secure than private sector jobs.

    Don't Know
    Date and time
    November 01, 2012, 1:07PM
    • you will soon be able to address all these issues with Zimm, the new recruitment app that is not a job board

      Date and time
      November 01, 2012, 1:08PM
      • Welcome to the future. I believe this is a natural progression. Advances in technology lets us to a lot more with fewer people. Jobs in the future, if they are still called jobs, will mainly be higher order or thought/problem solving type jobs. As technology finds ways to automate and replace lower order jobs, people will have to move out of their comfort zone and innovate/invest in themselves to continue being competitive in the marketplace, just like how companies and organisations must continue innovating to survive.

        The very interesting point that arises will be how the government deals with this. Innovation, advances in technology is encouraged, yet it's also the government's priority to keep unemployment rates low. What will the government do to make this transition seemless? Do they even realise what is going on?

        Date and time
        November 01, 2012, 1:40PM
        • Very true, but only those who are financial can afford to invest in themselves? bit hard for the jobless, the poor, to sign up for 20k courses etc without a job.
          Probably wont be far off till computers can really think and be creative, good luck everyone competing against that

          Date and time
          November 01, 2012, 2:51PM
        • There will be plenty of low-skill work available in aged-care facilities, Australia will have made the transition from "riding the sheep's back" through to "China's quarry" through to "wiping the baby-boomer's bottom".

          Date and time
          November 01, 2012, 5:39PM
        • Re keeping unemployment figures "low"...the government will redefine what "employment " means to all those who doing something, paid or not, for at least an hour a MONTH (not per week) and might even include all those who want to be employed. Such will be the spin.

          Date and time
          November 01, 2012, 5:46PM
      • The simple fact is productivitygrowth is mostly due to capital investment in new technology. This is why business gets the lion share of the extra returns. Why else would they bother?

        Young GF
        Date and time
        November 01, 2012, 2:03PM
        • Problemswith work today
          1. spot on underemployment: or Made up unemployment figues, people working 1 hour a fortnight should not be considered employed. It is hard to get a job, much harder than those with work think, and very depressing hearing there is plenty of work out there, its a blatant lie.
          2. Ridiculous prerequisites and not willing to try anyone without experience or wishing to career change - eg - Barista, must have 2 years experience ( please you are using a coffee machine. Anyone can be trained) Dish washer, must have experience! Sales rep - must have degree, 20 years experience, be fun, happy, go getter, driven, speak 5 languages, and have a strong interest in golf and charity work.
          3. Recruitment consultants - we are at the mercy of recruitment consultants who are often responsible for getting you the foot in the door,generally they have little knowledge about the area they are recruiting for, they generally struggled to get work in their preferred profession and if you miss out on a job they put you up for once, they will banish you.
          4. Lack of movement - Australians are just staying put in their work, those with full time work and that position of authority, as well theres nowhere else to go.
          5. Outsourcing - not talked about enough, millions of jobs expected to be outsourced by 2030 in finance, IT, manufacturing, whats our government do ??? best we learn chinese? our kids arent all going to be CEO's meeting up with Cinese multinationals, chances are your child will be an everyday worker in whatever industry is left, possibly working as a barista, that if he or she can get their foot in the door
          What is being done about jobs!!!

          Date and time
          November 01, 2012, 2:07PM
          • It's the demographics. I have had the "grey ceiling" my whole working life with just too many "senior" staff around to provide any career potential without changing jobs.
            Look at the stats: Lower home ownership, lower real wages, far fewer families (except for the bogan bonus families who will breed for a few thousand $)
            Regressive policy, excessive management (who are not qualified to manage in modern office environment) and excessive corporate profits will lead to big social problems down the track.
            The fact the Libs had to bring in the baby bonus to get Australians breeding again (the easily bought ones anyway!) should have been a heads-up.
            Whilst the boom was paid for on credit, the bust will be paid for by PAYG workers...yet another "wealth transfer" to the parasite classes.

            Date and time
            November 01, 2012, 2:09PM
            • parasite class?

              wow - these people are watching MASSIVE structual changes in the economy erode their "parasite" wealth. The young'ens at google et al have smashed the media companies to bits and these media companies were largely built and owned by "parasites".

              Wealth transfer is happening en masse for those working in the knowledge economy. If anything the older generation should be calling us the parasites, as we are undermining their wealth, gnawing away at companies that took decades to build but only years to destroy.

              Date and time
              November 01, 2012, 4:26PM

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