‘Labour isn’t working’ is a catchphrase stolen from the infamous Saatchi and Saatchi-managed UK Conservative Party election campaign of 1978. It referred to the then incumbent Labour Government’s inability to drive down unemployment which in that year ranged between 5 to 6 per cent following the winter of discontent (a phase of widespread private and public sector strikes over pay.) But for the current Australian market, ‘labour isn’t working’ refers to the current Federal and State Governments’ legislative agendas that are hindering a labour market recovery – getting people back into work.
In addition – and related – it refers to how the labour market has changed significantly since the perspective challenging Covid episode which resulted in many re-evaluating their work/life harmony.
Unemployment remains relatively low at circa 3.9 per cent (according to ABS data from January). And while many economists are forecasting this to rise during the coming months, the lower rate has not necessarily been fuelled by job creation but also by higher numbers of workers exiting the job market.
The Covid episode saw plenty of early retirements and migration in Australia. The phenomenon of the “great resignation” may have been less impactful here than in the US, but it has been followed by a period of “great contemplation” (The Guardian, April 2023.)
Government legislative measures regarding the labour market seem to focus mainly on protectionism and employee safeguards. While these are welcome and necessary, particularly for some industries, there has been a disproportionate focus on such measures to protect employees versus supporting businesses to get more people into work. Inevitably, protective measures usually increase costs to the employer and thus have the counterproductive impact of employees reviewing overheads with the result of potential job losses to control costs. Think Fairwork Commission pay increasing ahead of inflation, superannuation increases, and payroll tax increases in some states to name a few. Furthermore, there is future potential for employers to fund sick pay for casual workers (currently trialling in Victoria and temporarily subsidised by the State Government). Add to this list, ways of working protections such as flexible working arbitration, potential restrictions on out-of-hours contact from management and a movement to four-day weeks with five days’ pay and employers are facing challenging headwinds.
The government could proactively do more to support the labour market. There are more than 2.1 million people working in the public sector in Australia and this is growing given the number of national and local infrastructure projects. Whilst some might question the necessity of some of these projects, the impact is a vortex in the candidate pool with many workers opting for the union-supported/pay-protected public sector thus impacting the availability of resources in the private sector (ABS 2021-22).
Skills First Funding is a laudable mechanic to support vocational training. However, more consultation with the private sector on a needs analysis might prevent a disproportionate focus on training such as Expresso Machine Operation, Cert III in Nail Technology, Cert II, III and IV in Floristry, Cert III in jewellery design, and Cert III and IV in Circus arts.
The government has the resources to innovate in this space. Why not create a national “crowdsourcing” platform, for private sector employers to post roles, and potential employees to post their skills and attributes? This – almost a dating platform – would bring employers and employees together, and could result in quicker, more appropriate placements for job seekers who currently may be taking government support. It could be mandated that all government-supported citizens who can work, register on the platform as part of their job-seeking approach. The government can use the data and insights from the skills required and attributed staff database to design better training. Gamifying the platform will encourage workers to strive and harness the power of the instant feedback/social media vibe.
So the call to action is to mitigate against some of the labour market challenges, and rather than make it harder to do business, can government support facilitate and drive people into work versus disproportionately focusing on margin-eroding protections when people are working?
