Essential Report

Insecurity: It’s Not Your Fault

Sep 12, 2012

Before you read the thoughts of Janelle, Kathy, Andrea, Ewen and Penelope, you should prepare the right way: in the sixty seconds, whatever you do, under no circumstances should you think of PINK ELEPHANTS. NO PINK ELEPHANTS.

Of course, if you are human, your mind was immediately flooded with nothing but images of pink elephants.

That is because our brains are hard-wired to react, often emotionally, to certain words or images.

The same thing happens when we read words like “free market”, “job creators”, “productivity”, “flexibility” or “competition”, or when we see certain images representing those concepts. Our brains fire off memories and reactions that are burned deep inside us. We often aren’t even conscious of the feeling and emotions triggered by those words or images.

Those images and words, then, shape how we think about our world.

But, many of the words and images used to describe what is happening in the economy—words and images the traditional media has repeated daily for decades—are built on lies. Those lies make us feel like it’s our fault that we can’t make a decent living. Or that certain things happen naturally in the economy, like the sun rising in the east and setting in the west.

Which bring us to this startling fact: 40 percent of Australians—people like Janelle, Kathy, Andrea, Ewen and Penelope—wake up every day working in an insecure job. They are stuck in a cycle of insecure work not because of a lack of “productivity” or knowledge.

Rather, a sea of people are being crushed by a life of insecure work for one reason, and one reason only, according to “Lives On Hold”, a national inquiry into insecure work:

“This has occurred for a number of reasons, but the key driver has been the emergence of a business model across both the private and the public sectors that shifts the risks associated with work from the employer to the employee, and minimises labour costs at the expense of job quality.”

In plain English, what the authors of the inquiry are saying is this: the Robber Barons running the “free market”—which is just a figment of Tony Abbott’s imagination because there really is no such thing as the “free market”—want to make more money for themselves by keeping money out of your pocket.

They want you to work more hours for less pay. They do not want to give you any security—at all. They want all the wealth created by workers to flow into the pockets of a few.

This isn’t natural—and it isn’t even good, as we will see, from a pure economic standpoint.

This is all about power.

It’s about a Gina Rinehart-like greed: a vision of a country where the minimum wage is slashed and, as Rinehart publicly stated recently, workers’ wages are competitive with workers in Africa earning $2 per day. That is the Australia that Rinehart, the richest woman in the world, believes in.

To be sure, Rinehart’s “Let-Them-Eat-Cake” posture is extreme. But, it is only extreme because she is not shy about letting the expressions of her inner greed pass across her lips, to be heard by the public.

Across the business world, the basic philosophy is now pretty uniform: no permanent jobs, no benefits, no Super, low wages, no sick pay, no annual leave. Instead, the view of business is to push for more people to be in casual work, and to use more independent contractors who cost less to the businesses.

It is, at heart, a philosophy that we, business, have no responsibility to workers. We have no responsibility to society or the future of the country.

For a lot of people, it’s a bit hard to see because we read that Australia has an official unemployment rate of 5 per cent. Yes, that’s way better than the USA or most of Europe, but what rarely gets discussed is the added underemployment rate of seven per cent. Taken together, then, 12 per cent of Australians want to work more than they currently are.

If you, then, add to that the people on a low-wage, short-term contract who are likely to be out of work after a few months, the bottom 20 per cent of Australia’s workforce is stuck in a churn between unemployment, underemployment and short-term work.

These people have no job security, any small savings are burned up by periods of unemployment, and they are stuck in jobs that do not increase their skills or make them any more employable. They are trapped on the periphery of our economy, earning a little in boom times, but pushed to the scrapheap when times get tough.

These people are not being treated as human beings by the market, but as a disposable labour force.

What exactly does insecure work look like for 40 percent of the country? Back to the words of the independent inquiry:

“They are employed on various insecure arrangements, casual, contract or through labour hire companies, on low wages and with far fewer if any 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. If their skills are low, or outdated, 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.”

That life of insecurity should explain to the elites, or the willfully blind politicians or the media commentators why so many Australians are nervous about the future. Even though the most recent unemployment rate dropped to 5.1 percent—a figure that, on its face, should be a cause for celebration if one looks across the ocean at the U.S. and Europe much higher jobless rates—workers don’t feel good about their prospects; thousands have just stopped looking for work because they can’t bear the burden of insecure jobs being shoved down their throats.

You know that feeling, don’t you? Janelle does. She’s a 35-year old teacher at Beaconsfield Public School in Victoria and was the first person in her family to go to university. “I wanted more than fruit picking in my life,” she says.  But ever since she graduated, as an older student, she has only been able to find casual teaching jobs. “I got sick of it really quickly. Some times, I’d work all week and if I worked every day, I was fine. Some weeks I didn’t know if I would work and I wasn’t sure if I could pay my rent and that’s when I would start to panic.”

And, long term, it plays havoc with her life. “I can’t get a house loan, I can’t get a mortgage. I can’t take time off because we don’t get annual leave and I can’t be sick,” she says. Every end of the year is a mess for her. “It comes in November and December, we’re writing the kids’ reports and at the same I have to write job applications. I often end up a ball of tears. I live six months to six months.” So, why does she stick with the insecurity? “I love interacting with the kids, I like being a role model and it’s amazing to me that they look up to me.”

Kathy, who is 40-years old, with a mortgage, is in the same predicament:

“It’s really soul-destroying,” she says.

“I have had 40 jobs with 20 different agencies/labour hire over the past year. They tell me it could lead to permanent employment but it never does. We are always let go and sent somewhere else at the end of our three-month trial. “We are made to feel disposable and some places I am sent to the managers and employees say ‘Oh you’re just a casual’. This might be true but I still need to eat!”

Or Andrea who was fired when she made a bullying complaint against her manager but, because she did not have a union, she had no protection:

 Often people are juggling two casual jobs in market research and then they say no to one shift in order to say yes to the other but then they cancel your shift and you can’t go back to the other. You would get booked for work and get ready to be paid and they would cancel on you. “This would happen at least once a month. Financially it is very hard being casual and I’ve had to move to a place with cheaper rent because my other place was going up and up. My new house is a bit dingier than I would normally like to live in, but I couldn’t afford to pay $300 per week in rent when working casually.”

As Ewen points out, there is a personal cost to insecure work that goes beyond how much is in his bank account:

Relationships are hard to keep with women; they don’t understand the nature of my work. When I have to wait long periods in between work it causes tension and can’t handle it and leave. I have had numerous relationships failed over the years because of this and now it’s hard for me to be in a serious relationship because the conditioning of instability has become a part of me.

Penelope is highly-educated with a Phd but, still, her world of work is not a happy place even with her advanced degree:

“As a casual employee I have no access to conditions like sick leave, paid parental leave, etc. I also have no access to funding to attend things like academic conferences, which are an important part of the academic career progression,” Penelope says. “A large proportion of the academic workforce in Australia are also on casual contracts either teaching, researching or general staff. I know I’m not the only one, and something really needs to change. “Career prospects are few and far between for someone in my position. I have a PhD but full-time positions are rare and extremely competitive. My current and previous roles (as a tutor and research assistant on various projects) have definitely developed my skills, but there is no clear pathway in terms of training and development that might lead to promotion or progression towards more secure employment.

It is no accident that womens’ voices are more visible here: they bear a disproportionate burden of insecure work, as the inquiry points out:

“Women are much more likely to be in casual employment than men: with 25.5% of all female employees are casual compared to 19.7% of male employees.”

What should be of deepest concern to society is that the business model of insecure work is not temporary. It is a long-term vision that is already hurting future generations. In 2011, the Foundation for Young Australians found that:

“Over the 25-year period, the clear long-term pattern is one of decline in full-time employment for each age group, a trend which has been much more severe among teenagers (dropping by more than 22 percentage points) than among young adults (for whom there was a fall of 9 percentage points)…There is a shadow of unstable employment behind any estimates of the proportions of young people who may be at risk of marginalisation.”

So, how did we get into this mess? In a country where the notion of a secure job and fairness is part of the story one tells about the good life in Australia, how did a cancerous business model spread?

A big part of the answer lies at the feet of the transcribers of press releases, the people we once called “journalists”. They have bought, and promoted almost without challenge, a whole set of lies and misinformation: the idea of the glory of the “free market”, the genius of “job creators”, the supposed crisis in worker “productivity”, the need for a company to have “flexibility” in order to win the “competition” for the future and that the high tax level for businesses discourages investment.

Some of this is just pure laziness. It is easier to just regurgitate slogans or rhetoric, without actually doing the hard work of thinking through what is factual or not. And it’s not even hard work, thanks to an apparently obscure tool called “Google”.  For example, in virtually every independent, honest survey of business executives around the world over the past 25 years, worries about tax rates rank far below, for example, access to an educated, skilled workforce, and good transport systems—all of which can’t happen unless a society has a significant tax base.

It is the laziness of regurgitating the word “cost” without thinking what it means. Business leaders, and their political mouthpieces in The Coalition, spit out the word “cost” only in what it means in some business plan.

But, that word “cost” is a weapon that allows the murder-by-spreadsheet of Australian society. Lowering “costs” in the world of insecure work is aimed right at the annihilation of a middle class, killing the ability of every person to hang on to a modicum of a fair living.

It is the laziness of the media’s slavish acceptance of the phrase “free market” and an almost religious reverence accorded CEOs, particularly when business leaders attack government, taxes or any regulation that is deemed a drag on “competition”. Rare is a moment when a journalist will point out that not one of these vaunted “job creators” made his profit in the mythical “free market” because every dollar was made because of investments made by the government—meaning, us—in roads, bridges, broadband, and schools. By in large, Australia avoided the worst of the Global Financial Crisis thanks to strong government regulation of the banking sector, which prevented Australia’s bankers from mimicking the criminal and irresponsible behaviour on Wall Street.

Some of it is the fear, especially in an era when media organs are shedding jobs faster than a long-haired puppy. When everyone around you in the office, and every other media organ, is repeating the idea, for example, that we have a worker productivity “crisis”, it’s scary to go against the tide (though exceptions can be found to the rule: Ian Verrender shredded the lie about the productivity “crisis”—but, of course, his was one column of opinion, outweighed by daily mountains of copy in the news and opinion pages and TV programs bemoaning the “crisis”).

Which leads to the prevailing disease of “false equivalency” practiced by the media. That is, if a union points out the attack against workers is eviscerating, based on the facts, wages or secure jobs, the media feels obligated to get “the other side”. The “other side” will wave its rhetorical wand, invoking “productivity crisis” and “competition”, even if the facts don’t support the rhetoric. Yet, the opposing arguments are treated as equally rationale or fact-based. This is “false equivalency” because one side’s argument is based on facts and the other side’s argument is a mountain of lies.

Of course, we can’t stick the media with the sole responsibility for the crisis. Unions have not been successful at stopping the insecure work virus. However, what is really refreshing is how forthright union leaders are about the challenge. Ged Kearney, the president of the ACTU, is single-minded about attacking the challenge of insecure work to the point of passionate, heartfelt pleading but she starts with the recognition of the union movement’s late response.

“We are at fault here, we failed them,” she said in an interview. “Because we tend to protect our own, you protect those who are covered by your agreements.”

That’s understandable, truthfully. The union movement doesn’t have unlimited resources and it is hard work just to make sure the people who are covered by industry agreements are looked after. Especially in an era when, day after day, employers seek to break agreements and at least half of the political class—in the form of state and federal Coalition ideologues—want to roll back the Fair Work provisions.

It is also true that the sense of solidarity is not strong. “Permanent workers are not terribly keen on fighting the fight for casual workers,” she concedes. The task of the ACTU, then, is that “We have to raise the point among them as that this is the world your kids are going to live on.”

And, with all the good intentions, people who are not in permanent jobs are just tougher to organize into unions. “They are not all casuals,” says Kearney. “They are very, very difficult to organize into the movement. They are on the periphery of our movement.”

One can be assured that if Gina Rinehart decided, on a whim, to donate say one billion dollars to the ACTU to organise these casuals, it would happen much quicker.

Now, of course, the notion of a Rinehart-funded union organizing drive is preposterous and lunacy—but only because of the unpatriotic, selfish posture adopted by Rinehart, or a whole coterie of billionaires and elites.

But, from a pure economic standpoint, and even slightly selfish perspective, it would entirely make sense. Before you reach for the smelling salts, consider this:

  • No economy can function, and no business can make money, if average people don’t have money to spend. Even Gina Rinehart can only buy so many flat screen televisions, high calorie meals, cars and other goods. As rough a man as there ever was in the annals of global business, US auto czar Henry Ford, used to say he wanted to make sure his workers earned enough money to buy his cars.
  • It is an unchallenged fact that unions ensure people get a fair return on the work they do and, then, have more money in their pockets.
  • Thus, unions mean broad economic prosperity and sustained economic activity.

About the Fair Work provisions, which are a critical anchor to make sure prosperity is shared, a recent review found:

”After considering the economic aspects of the Fair Work Act the panel concludes that since the Fair Work Act came into force, important outcomes such as wages growth, industrial disputation, the responsiveness of wages to supply and demand, the rate of employment growth and the flexibility of work patterns have been favourable to Australia’s continuing prosperity,” it says.[emphasis added]”

When you get that equation, and you add in the actual experience of  Fair Work, you quickly understand that what is driving economic policy is ideology and greed, not economic logic and facts.

At the end of the day, economics is not bloodless and boring. It’s actually a question of morality and vision. The path one chooses for an economy is a reflection of who we are as a people.

Australia has historically had a unique welfare system, based not on direct payments from governments (except for the Aged Pension) but on guarantees built into the free market itself. We have had an industrial relations culture based on the centralised fixing of wages and conditions to allow a wage earner permanent secure employment at a wage, not set by the market, but set at a level that was seen as fair and allowed for a family to live a decent life. Unions made sure that benefits like sick leave were the responsibility of the employer.

The ethos was to celebrate a great degree of social equality within Australia, which, for many years, meant that we avoided the emergence of a working poor, allowed for high rates of home ownership, and it has meant that the majority of people spent their entire working lives without requiring food stamps or payments from the government to provide them with economic security. By contrast, for example, the US recently hit a dubious mark: the highest level of poverty since the government started measuring statistics fifty years ago.
But, it’s now Gina Rinehart’s vision of the world: the welfare safety net that was wrapped up in our industrial relations system has been lost. Casual workers now have none of the protections that were once guaranteed, and no government-funded safety net has sprung up to fill the gap.

We are seeing, for the first time in Australian history, the emergence of a working poor.

We are seeing a level of inequality which would have been quite alien to Australians of a couple of generations ago.

The response from Coalition governments, in particular, has been to implement policies that subsidise those wealthy enough to afford private health or education, which will only further entrench these inequalities. Even the compulsory superannuation scheme, a forward thinking piece of public policy, delivers benefits to workers based on their ability to pay into a fund, rather than the equal payment to all guaranteed by the Aged Pension.

Insecure work, then, is a challenge to define what kind of Australia we want. The choice is crystal clear: either the future ends up adopting the Gina Rinehart vision of slave wages, no middle class, a growing gap between rich and poor and a society where all the power is in the hands of the elite and business owners. Or we choose a democratic society in which the wealth of the nation is shared fairly and where real security means workers of every age, gender and different backgrounds have power over their lives, waking up every day knowing that, when they walk out the door of their homes, they are going to come home paid for a fair day’s work at a job that awaits when the sun rises the next morning.


Does Australia have a working poor?

Jul 10, 2012

Charities are reporting a 50 per cent increase in calls for help and most are coming from underpaid workers, says Ged Kearney.

Australia’s economic success amidst global uncertainty is the envy of the international community. Yet despite Australia’s glowing report card, there is a growing class of people known as “the working poor”.

These are people who are most often employed in the service industry, working shifts and surviving on a day-to-day basis. They are paid the minimum wage which is actually less than half the average wage in Australia. ACTU President Ged Kearney tells 3Q this section of the population have slipped through the gap and are not part of the national debate.

Why would anyone join a union?

May 15, 2012

Ged Kearney says the union movement needs to emphasise its achievements rather than letting others focus on the negatives.

As the ACTU Congress meets this week, the HSU East and Craig Thomson affairs continue to dominate the political landscape.

But ACTU President Ged Kearney says Congress will be focusing on the future and the policies which make the work place — and society – fairer.

She tells 3Q that even though union membership has dropped, thousands of people join unions every year. With an increasingly casualised workforce, Kearney says unions are needed more than ever.



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