eNews 6 August 2019 - Future of Work (part 3)
FROM THE DESK OF CHDC'S REGIONAL SKILLS DEVELOPMENT COORDINATOR
Future of Work in Queensland – Part 3
In my previous article on Jobs Queensland’s Future of Work project, I discussed the effects of demographic and social drivers of change. In this article, I will focus on the final driver Legal, Institutional and Policy. These influences, guided by various institutions, have also helped shape the employment and social landscapes of Australia over the past century – arguably more so than technological and social/demographic change.
In Jobs Queensland’s discussion paper The Future of Work in Queensland to 2030*, it states:
The interplay between these changes has the potential to create a ‘perfect storm’, presenting new and potentially amplifying existing opportunities and challenges for Queenslanders.
While the term ‘institution’ itself comprises many aspects, in this section the primary focus is on the formal institution of government and the influence it exerts through public policy intervention. Other formal institutions such as economic and legal systems, and the factors within these systems, are also considered. The environment in which these institutions and the other drivers interact is often referred to as the ‘political economy’.
Australian institutions and the labour market
The Australian government has implemented many important structural reforms over the past 40 years that have helped see the nation today enter its 28th year of uninterrupted annual economic growth.
The reduction and removal of the tariff system, floating of the Australian dollar and central bank independence helped Australian businesses and economy compete on a global stage. To cushion workers from the effects of the reforms to Australia’s tariff system, the government of the time negotiated a ‘social wage’ with the Australian Council of Trade Unions (ACTU) under the Prices and Incomes Accord while moderating actual wage demands. Wage determinations were decentralised and the system of enterprise bargaining entrenched under subsequent governments, weakening the role of trade unions.
Subject to greater international competition, employment in manufacturing contracted and a decline of blue-collar jobs, often precipitated by technological change, contributed to the drop in union density. At the same time, the rise of the services sector has resulted in less-capital intensive, smaller scale production reducing the imperative for a stable workforce. Female participation in the workforce, which had been restricted by the primacy of the standard employment relationship and the institutions around it, increased. The expansion of Australia’s migration system (including trade in international education) has seen the arrival of a segment of overseas workers who often work in industries such as hospitality, agriculture and the transportation industry where award protection is difficult to enforce. Technology also enabled the vertical disintegration of production and the subsequent outsourcing of various tasks to specialised businesses.
Non-standard employment
Outsourcing, contracting and sub-contracting have a long tradition in employment history and these were the predominant forms of work until the late 19th century, when the first factories began to appear. The more recent quest for increased labour market flexibility has led to claims about the prevalence of non-standard work arrangements and precarious work. Determining the proportion of workers employed in these different arrangements is challenging. The OECD notes that definitions of non-standard work arrangements are often defined by what they are not, rather than what they are.
These alternative forms of employment are cited as beneficial to the economy overall, contributing to increased labour force participation, promoting linkages between work and the unemployed, and increasing services and choice for consumers while reducing costs. Non-standard forms of employment and the conditions on offer are far from homogenous. Fixed-term contract workers generally have similar work schedules and wages to that of standard workers and tend to be highly-skilled.
Part-time employment
Both demand and supply-side factors, including the transition towards a service-based economy, the increased propensity to combine work and study and the Australian tax/transfer system, have influenced these changes to the composition of employment. While part-time work is on the rise, the reasons for this are contested. Some commentators promote part-time work as a ‘choice’ while others contest that people are being ‘forced’ into part-time work.
Cassidy and Parsons identified the three most common reasons for undertaking part-time work:
• to accommodate study
• a preference for part-time hours
• caring for children.
Precarious work
The concept of ‘precarious work’ is multidimensional, encapsulating underemployment, insecure/lack of employment rights, benefits and entitlements as well as job insecurity. It is difficult to define as even people in full-time permanent employment may perceive their employment to be precarious for a variety of reasons. Conditions, wages and levels of precariousness are dependent on a number of factors.
The Independent Inquiry into Insecure Work in Australia (2012) defined insecure work as that which provides workers with little social and economic security, and little control over their working lives. Indicators of insecure work are:
• unpredictable, fluctuating pay
• inferior rights and entitlements, including limited or no access to paid leave
• irregular and unpredictable working hours, or working hours that, although regular, are too long or too few and/or non-social or fragmented
• lack of security and/or uncertainty over the length of the job
• lack of voice at work on wages, conditions and work organisation.
The impact of the rise in alternative forms of employment such as part-time and casual work, labour hire, independent contracting and gig work is contested. For employers there may be some short-term gains from such arrangements through greater worker flexibility and cost savings.
The ‘new’ gig economy
One of the alternative forms of employment attracting recent attention is associated with the ‘gig economy’. The gig economy is most commonly described as involving the following characteristics:
• work is not ongoing and is performed on-demand
• payment is by task or unit of output
• workers are responsible for providing capital (location, tools and equipment)
• a triangular contractor or subcontractor relationship exists
• work and payment is organised via a digital platform
Well-known examples of these digital platforms in Australia include Uber, Airtasker and Deliveroo.
The number of people engaged in the gig economy in Australia is also difficult to accurately determine. One 2015 report estimated that 30 per cent of the Australian workforce was involved in freelancing while other reports indicate that fewer than 0.5 per cent of Australian adults were actively working on labour platforms. McCrindle Research cited the growth of part-time workers in the latest Census as evidence that the gig economy is ‘on the rise’.
Uncertainty around the categorisation of workers is not confined to ‘gig workers’. In the wake of the Federal Court finding that an employee classified as casual was actually working in a capacity that entitled him to paid annual leave, the New South Wales Business Chamber has applied to the Fair Work Commission to create a new ‘perma-flexi’ category of worker. Under this categorisation, casual workers who work regular hours would be entitled to access to annual and sick leave entitlements, but their leave loading would be reduced and employers would retain the right to vary weekly hours.
Regulation of technology
Technology does not develop in a vacuum and its uptake and usage is dependent on economic, scientific, political, organisational and educational influences (Little, 2010). Current examples of the development of electric power in the West, pointing out that the ‘social implementation’ of electrical power was influenced by numerous non-technical factors and its proliferation depended on the development of vertically integrated production systems including banks and factories.
Why regulate?
Technologies have a moral dimension, sometimes intentional (such as the development of the internet to increase accessibility) and sometimes unintentionally, reflecting the values and biases of their creators. The latter has consequences for services increasingly reliant on algorithms and AI, which may impinge on basic rights for workers. The intermeshing of technology with contemporary society bring benefits but it also creates risks. As well as personal risks concerning cyber security, data privacy and sovereignty, cyberattacks on infrastructure are serious and have the potential to shut down a business, network or region. The vulnerability to hacking for autonomous vehicles and networked medical devices may see the implementation of such technologies slow down or even abandoned.
Approaches to regulation
Regulation of technology is important, not only for moderating and mediating the effects of technology, but in also influencing the actual development of particular technologies. According to Solomon (2016) there are four questions that need to be asked around the governance of technology. These are:
1. Should a technology be developed at all?
2. If a technology is going to proceed, how should it be used?
3. If a technology is to go forward, how should it proceed?
4. Once norms have been set, how will the field be monitored to ensure adherence?
Regulation is, of course, a balancing act.
Regulation may place a compliance burden on businesses, causing a diversion of resources away from innovation, or compliance may actually drive innovation, as businesses seek to minimise the costs. To this end, regulations should be designed for transparency (to reduce information asymmetry) and flexibility, yet also be unambiguous and rigorous.
Implications for employment
Quality work
In the current discussions about the future of work, many have stressed in the context of existing and projected changes to technology, demography, society and business/employment models there needs to be emphasis on ensuring that quality work and work opportunities still exist heading into the future.
There has been a noticeable move away from full-time towards part-time employment, which some commentators have equated with ‘precarious employment’. If part-time work offers the same conditions and protections as full-time work (i.e. regular/set hours, regular income, stable and ongoing employment with all the entitlements of full-time employment), can it be considered to be ‘precarious’?
Does this then mean that quality work is indeed declining in Australia or is it a reflection of changing demographics (or both)? Research conducted by Burgess, Connell and Dockery considers quality work to be the extent to which a set of job attributes contributes to, or detracts from, workers’ wellbeing in their work and non-work domains. This is a very broad and employee-centred definition and the relationship between work and wellbeing can be viewed from many different perspectives and disciplines. The authors state that an important caveat to any assessment of job quality is that individual workers have different preferences – being employed part-time is not in itself a feature of low quality work, but rather hours of work have to be assessed relative to workers’ preferences.
Considerations for the future
• How prevalent are ‘new’ work arrangements (e.g. gig/platform-mediated work) in the Queensland economy?
- Who is participating, why and to what extent?
- How can we define and measure uptake/use/participation in these new arrangements and quantify their impacts on participants?
• What is the role of institutions (government, vocational education and training, etc.) in the process of transition?
So, we have addressed all the major drivers for the future work. My next article will focus on how we overcome these drivers of change and find a path to meet these challenges.
* See original document for all references: The Future of Work, Literature Review State of Queensland, Jobs Queensland, February 2019.
Latest News: Trade and traineeship list expands
The Queensland Government has announced an expanded list for trades and traineeships as part of the Skills for Queensland. There are now 140 high demand roles on the list, providing savings up to $3000 for some courses that weren’t previously funded.
Training and Skills Development Minister Shannon Fentiman says the plan targets critical skills shortages, new skills needed for existing jobs, emerging opportunities around technological advancement and regional and statewide priorities.
The Government will fund courses whether they are taken at TAFE or through private training companies.
See here for the full list of funded programs.
Contact CHDC Regional Skills Development Coordinator Brad Stallard E: bstallard@chdc.com.au or T: (07) 4982 4386 or M: 0488 780 181.