Essay On Labour Economics

1516 words - 7 pages

Labour EconomicsThe current problems between Qantas and the ACTU over employment of casual labour highlight substantial changes in the composition of the Australian workforce over the past few decades and some of the resistance to it. Gone is the traditional ' cradle to grave' career. These changes have come about for a number of reasons. New technology, micro and macro economic reforms, eg. tariff reform, industrial relations reforms, standards and quality controls have all brought about significant change. Other factors influencing this process, has been the adoption of management strategies that emphasise flexibility, requiring more use of part time and casual labour.'Full time work is defined as employment that requires workers to work 35 hours or more per week. Part time workers are those that are employed less than 35 hours.' (Healey, 1999, p.6) Casual are those that are not entitled to either annual or sick leave entitlements which permanent employees enjoy, thanks to the efforts of organised labour in the form of trade unions.Use of more efficient mechanisation and technology has reduced the number of workers in traditional 'blue collar' areas such as low and semi skilled workers in manufacturing, and mining industries, leading to a reduction of 70,000 workers between 1988-1998. It is not only 'blue collar' workers who are affected by technology and automation. During this time, technology has led to the reduction in the finance sector of 16,200 jobs. The increasing unemployment, has led to a greater demand for fewer jobs, therefore less job security and in some cases replacement of full time with part time work. 'These shifts in employment opportunities resulted in an increase in service industry jobs to nearly 72 percent in 1997 of all employment. Hospitality and retail both have large numbers of casual and part time staff, hospitality with 45 percent and 42 percent in retail'. (Healey, 1999, p.2)Micro economic reforms, such as, tariff reductions, floating the Australian dollar, deregulation of key industries and the liberalising of foreign investment have also led to a change in employment opportunities away from traditional and sometimes inefficient industrial or manufacturing work. These changes in policy have exposed our economy to direct competition with global markets, making less efficient industries change their ways or disappear. These changes often require more flexibility than full time permanent employment could offer. The government with help of the unions have attempted to address some of these problems with greater use of enterprise bargaining and other workplace reforms but these are largely applicable to medium to large business and not small business. 'The combined effect of these influences has resulted in 27 percent or 2.5 million workers being employed on a casual basis. In comparison to 1984 when the ratio was 16 percent of all workers.' ( is a business strategy that started in the 1980's and continued through the 1990's. The original rationale for downsizing or redundancies was part of a streamlining process brought about by the lowering of tariffs and protection of our economy, requiring greater efficiency for survival. Combined with weak economic performance during the late 1980's and early 1990's, this method was seen as a way of maintaining or increasing company profits.Management soon realised that some of the full time positions were no longer required even in times of economic expansion and instead relied on outsourcing to hire companies and consultants to fill any shortfall in labour. Outsourcing, once having established a presence in the 1980's, began to look increasingly as a better alternative to permanent positions giving management more labour options with less overheads required to maintain staff.Small business have always had problems with matching its long operating hours with the requirement to provide full time employment with penalty rates and the various leave benefits. Anti dismissal provisions in the labour awards, have made full time or permanent part time employment unattractive to most small business operators. Causal employment is therefore regarded as the most efficient use of labour in this sector with the ability to easily hire, fire and adjust working hours to suit the business. It is this flexibility that makes casual employment so attractive to employers.Female participation in the labour market has had the greatest effect on changes to the job market. ' Women as a group of labour participants have risen from 38 percent in 1965 to 54 percent in 2002'.(ACTU) The female participation rate in the job market started to increase significantly during the early 1980's as high interest rates and low real wages took their toll on household incomes. Women constantly try to balance economic needs with family needs and self-development leading to shifts in participation rates. During the late 1990's and early 2000's, there was a shift away from full time to part time employment due as much to improving economic conditions increasing real disposable income as to other factors. 'Currently 59 percent of all casuals and 67 percent of part time workers are women'. (ACTU)). During this time another job/time management concept surfaced. 'Job sharing, an arrangement between two or more people sharing the same full time position, on a regular basis'. (Healey, 1999. p.20) This arrangement enables skilled and experienced staff to stay employed while still allowing the flexibility of their personal situation, but 'allows employers to retain good staff and gives employers the ability to respond to social and demographic changes in society and the labour force'. (Healey, 1999. p.20).As with all economic and management strategies and decisions, there are positive and negative outcomes. The implications of a shorter or less frequent work hours mean less income and this can have negative economic consequences. 'The financial consequences can lead to hardship and has created a 'working poor' in part time or causal employees'. (Murphy, 22/08/03). A recent ABS survey revealed, '70 percent of casual were in fact part time workers and 37 percent of these wanted more hours'. ( Also the social consequences can be equally devastating. However, when the decision to move from full time to part time is made by the employee it is most often positive allowing greater flexibility, while retaining a level of income and participation in the workforce with a 'foot in the door', thus giving a balance between personal and family commitments and economic considerations.Some of the blame for the casualisation of labour has to be borne by the union movement and its quest for continual improvements in worker conditions and entitlements even during a contracting economy. Once casualisation of the workforce began the trade union movement found it difficult to control. There have been many disputes and despite there being legitimate concerns by unions to this trend, the weight of both the Government and employer groups have been too great to resist. 'There is an expectation that a third of all workers will be casual or part time by 2010'. (ACTU) The implications of this outcome will weaken trade union influence further as traditionally casual workers have low membership levels.This in turn will further marginalise casual and part time workers who are the new working poor. Without an organised labour movement to advocate for then, their conditions of employment will deteriorate even further. The future for casual and part time workers looks insecure if some minimum safeguards are not established. At present, casual rates do not fully compensate the workers for loss of award benefits of full time work. The trend towards 'casualisation' of the workforce is well established and has a legitimate place in the economy.However, the social cost must be addressed, particularly when full time positions are replaced with part time. There must be an incentive for a person to work rather than to receive welfare on a consistent basis. At present, with the cost of employment such as travel and work clothing, it can end up costing more to work than to stay at home. The casualisation of labour is a trend that will not automatically benefit our macro economic situation and the government must act by involving all parties such as; employer associations, employers, employees, and trade unions to create balanced strategies and solutions to ensure equality for all.BIBLIOGRAPHYHealy, J. ed. 1999, The Future Of Work - Issues In Society Vol. 115Balmain, The Spinney PressMurphy, C 2003, New Working Poor of growing concernThe Australian Financial ReviewLatham, C Can unions stop the spread of casual work? (10/08/03)ASB Survey How well is casual labour working?


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