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We are witnessing the emergence of a new working poor

Date

Brian Howe

The divide between blue and white-collar workers has become much uglier.

THERE is a new divide in the Australian workforce. It is no longer between the blue-collar and white-collar worker, but between those in 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, in management positions, or possessing skills for which there is steady demand and for which they can charge a premium. They are likely to have sick leave, paid holidays and in many cases parental leave above the government's minimum standard.

For them, flexibility means the chance to work in a variety of industries, to work overseas, to earn good money freelancing or in a secure part-time arrangement. Periods of unemployment are likely to be short or voluntary.

Those on the periphery are employed on various insecure arrangements - casual, contract or through labour hire companies, on low wages and with no benefits.

Many do not know what hours they will work from week to week, and often juggle multiple jobs to attempt to earn what they need. Their skills are low, or outdated, and they are not offered training through work. They shift between periods of unemployment and underemployment that destroy their ability to save money.

Their work is not a "career"; it is a series of unrelated temporary positions that they need to pay rent, bills and food.

For them, flexibility is 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. For many, life on the periphery is not a temporary situation; there is no pathway into the core.

For the past six months I have been the chair of an inquiry, commissioned by the ACTU, into the phenomenon of insecure work. In hundreds of submissions, and during hearings around the country, we have come across a multitude of stories from people on the periphery. Although 40 per cent of Australian workers are in insecure work, this is a development of the Australian economy that has avoided proper examination for too long.

For people in their late 20s, with children and mortgages and no time to retrain; or older men in their 50s who have lost full-time work, this is their permanent position.

Increasing numbers of workers are engaged in unpredictable, uncertain work that undermines their security. Others fear that the loss of a good secure job will push them into the world of insecure work they see around them.

This uncertainty makes people more sensitive to rises in interest rates, power bills and petrol prices.

For the first time in our history since Federation, Australia is seeing the development of a working poor.

As long as we can retain our relatively high minimum wages and public health system, we will not see the extremes of poverty of the United States, but we will see a society with families where one or both parents work, but who are unable to save or own a home, and remain vulnerable to the slightest financial crisis.

What this means for social mobility and social cohesion is the great unknown, and a subject that is only obliquely referred to in political debate.

This is particularly the case when combined with a growing number of inter-generational jobless households.

The economic changes of the past two decades cannot be unwound. But the unforeseen consequences of insecure work must be addressed to continue to produce jobs that will preserve the Australian social contract that has provided a decent welfare safety net, and a chance at social mobility, for generations of citizens and migrants.

Changes are needed not only to our employment and labour laws, but to the role of government and the social security and tax transfer systems, to education, training and labour market transitions and, yes, to our trade unions.

The inquiry into insecure work will be making a number of radical recommendations in these directions. It is our hope that governments, the community and industry do not shirk from dealing with these issues.

Brian Howe is a former deputy prime minister of Australia. This is an edited extract of a speech he gave to the National Press Club on Wednesday.

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