Labor Market Changes and in Australia since the Mid 1980s

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Table of Contents

Introduction
Changes in labor market
Increase in women participation in labor market
Changes in type and employment structure
Growth in non-standard employment
Growth in wage inequality
Changes in employment relation within workplaces
Workplace change under disjointed flexibility
Conclusion
Reference

Introduction

Over the past decades, there has been a significant change in how Australian employees participate in employment as well as organization of their working environment. This has greatly been caused by increase in competition for labor force in the country (Alexander & Green 1999, pp. 45-63). Currently, organizations have embraced a relatively temporally employment relationship as well as market based mechanisms to work restructuring, skills development and payment. Globalization has led to organizations having access to global market. Consequently, they have been subjected to competition. This has led to companies in Australia embarking on downsizing by outsourcing some of their functions which are not very vital and cutting down on middle management (Australian Manufacturing Council (AMC) 1990, p. 123). Companies are also focusing on using casual and part-time employees. Unlike in the past, organizations are no longer employing people permanently. Every employee is encouraged to perceive his or her employment as a stage in his or her process in career development. Swift changes in technology coupled with dynamic consumer needs are seen as the main factors contributing to organizations offering short-term employment (Baird & Lansbury 1998, pp. 141-153). This paper is aimed at discussing some of the changes that have occurred in employment relationship and labor market in Australia since mid-1980s.

Changes in labor market

Australian labor market organizations and supporting economic rules are dated back to post-war settlements. These were characterized by centralization of wages, employment conditions setting, white Australian policy and industry protection. During this period, wages were set based on demand by male wage earners as well as comparison with employees doing similar work in different organizations. Hawke and Keating governments are credited with termination of post-war settlement. They introduced policies that focused on reduction of protection through introduction of domineering industry prop up packages to cater for effects of protection reduction. They also promoted centralized control of wages (Buchanan, Callus & Briggs 1999, pp. 43-67). In early 1990s, the government did away with protection and started deregulating labor market through decentralization of wage fixing and allowing enterprises to come up with their individual employment conditions (Business Council of Australia (BCA) 1989, p. 76).

Increase in women participation in labor market

One of the clearest changes in labor market in Australia since mid-1980s has been increase in the number of women participating in labor market. Before then, a small percentage of women participated in labor market with women holding approximately 30% of jobs in the country. By 1995, the number had significantly increased to about 53.9%. Compared to men, women experience in labor market differs considerably. In 2004, 45% of part-time employees comprised of women with men forming 15% (Campbell 2002, pp. 98-123). This was encouraged by the move by employers to change most of their full-time jobs to part-time especially in banking industry. In the same year, women formed 29% of casual workers relative to 29% of men. However, increase in number of casual workers since 1990s can not be attributed to women participation in this employment. Despite women still being concentrated in casual part-time employment, their number has declined from 79.1% to 66.8% between 1984 and 1998 (Campbell 1996, pp. 76-95). Contrary to this, the number of males participating in casual part-time employment has increased. Between 1975 and 1995, real wages for all employed women increased. Variations in women’s income also went down during this period.

Changes in type and employment structure

Another change that has occurred in labor market of Australia is change in employment structure. Organizations have changed from manufacturing to services especially retail and hospitality services. In1990s, the country also experienced changes in unemployment, participation and employment rates. Early 1980s and 1990s experienced an economic recession which led to increase in unemployment rate. 1990s saw a reduction in unemployment rate with a reduced pace of employment growth. This was attributed to slower rate of growth in working age population. Participation rates by labor force were also low during this period. The most outstanding variation between the two decades is the trend of employment growth (Campling & Gollan 1999, pp. 144-153). In 1980, full-time employment growth registered 57% of new jobs while in 1990s it registered 25%. Growth in full-time jobs in 1990s was found to be a quarter of what had been registered in the previous decade this was dominated by managers and professionals (Cully 1999, pp. 1-15).

Growth in non-standard employment

Another significant change that has been experienced in Australian labor market has been change in nature of employment arrangements. For twenty five years after the Second World War, every employee had a job that guaranteed a steady wage or salary (Dabscheck 1995, p 45). These jobs also had standard weekly hours not exceeding forty hours. In addition, there was expectations that if every employee met the required performance standards, he or she would remain with a single employer for the longer time of their working life. However, this has gradually changed over time. Currently, most of the employees are involved in either part-time employment as well as irregular working hours that vary from time to time based on the amount of work in the organization. Moreover, employment contracts are being used to spell out arrangements that interrupt continuity of employment (Gollan & Davis 1999, pp. 69-91). These include informal employment provisions where employment can be terminated at employer’s will.

Growth in wage inequality

Australian labor market has experienced a trend of significant growth in wage inequality especially among employees who are permanently employed. Throughout mid-1980s, growth in wage inequality averaged for both male and female employees who had full-time employment (Gough, R. 2006, pp. 48-76). This variation was found to result due to establishment of enterprise bargaining, a system that led to employees working in similar job groups receives different wages in different organizations. Another reason that has led to growth in wage inequality in Australian labor market is retardation in growth of wages offered to lower-paid workers especially men. Some researchers have argued that this has resulted due to increase in number of women and young people participating in casual and part-time employment. However, this has been proved wrong from research conducted by Kelly and Underhill (1997, p. 347). The research reflected that seventy percent of low-wage earners are aged between twenty four and fifty four years. Also the research found that seventy percent of employees receiving low wages were full-time employees. It was revealed that most of those receiving low wages had no formal education. By 1994, the number of male who received low wages had increased from seven percent t fourteen percent.

Changes in employment relation within workplaces

In mid-1980s, the government came up with a structure of changing employment relation in steel and automobile industries. These were the two industries that greatly contributed to the country’s economy and employed a lot of workers (Kitay & Lansbury 1997, p. 432). Despite the two industries being given tariff protection they were affected by employment relationship problems. In steel industry, training was provided to all workers and there were consultations between all stakeholders in the industry before any decision was made. Workers were assured that there would be no compulsory joblessness and workforce reduction would be conducted based on voluntary early retirement systems and labor turnover (Lansbury & Bamber 1998, pp. 26-30). Organizations also incorporated employees and unions in making out new skills and job categories that were attributed to new pay scales. While unions were unsure of the effects of introducing teamwork and other forms of organization restructuring, organization agreements have led to them coming up with novel work designs and payment based on skills. There has also been establishment of various forms of employee participation programs to facilitate in allowing workers to take part in decision making at organization level.

Changes in organization structure coupled with changes in rate of male and female participation in employment have had significantly effects on employment relations at workplaces in Australia. One of the most visible effects has been issue to do with trade union membership (Macneil, Testi, Cupples & Rimmer 1995, p. 643). These changes are perceived to have adverse implications on trade union memberships. This is because service industries have for a long time not been unionized. Decline in unionization rate in the country between 1982 and 1992 is associated to changes in employment composition. Shift from goods manufacturing industries to those that focus on service provision has resulted to employers emphasizing on interpersonal skills rather than motor skills. There have been changes on how workers are employed as well as the number of hours every employee deserve to work. There is an increase in tendency by employers to contract most of their labor requirements rather than employing more staffs. This is greatly changing the order in which employment arrangements are structured in the country (Mathews 1994, p. 75). There is a gradual shift in employment composition to that characterized by self-employment.

Workplace change under disjointed flexibility

Assumption of John Howard government to power led to a new wave of changes within workplaces. Despite the government taking the initiative of dismantling the country’s arbitration system, it sought to shift employment relation in the country away from its socialist customs that gave unions strong roles to a more disjointed system that focus on personal bargain between employees and employers. The Workplace Relations Act established in 1996 reflected the move to decentralize industrial relations to organizational levels (Walsh 1997, pp. 34-58). The move signaled the advent of agreement between employers and their employees without depending on trade unions. The Act seeks to allow employers to arrive at a consensus with employees without involving trade unions. They also look for ways to encourage employers to enter into personal contracts with their employees. The latest analysis of agreements made between employers and their employees without relating trade unions reveal the various strategies used by employers to ensure that they enhance productivity and compliance within employees (Wooden 2000, pp. 126-149). Most of the organizations have implemented an advanced human resource approach that accentuate on high quality results from employees. Others have embarked on reducing costs.

Conclusion

From the changes that have occurred in labor market and employments relationship in the country, numerous groups have been disadvantaged. This has come without organizations looking for compensating benefits for the effected groups. Some of the adverse effects that have accompanied these changes include job insecurity, high earning inequalities among workers and increment in working hours. Increment in number of casual employment as well as outsourcing has posed job insecurity to full-time employees. High rate of emergence of precarious employment has made it hard for people to get and retain proper jobs (Wooden 2002, pp. 51-60). The move to shift decision making process to organizational level leaves employers with the privilege to terminate employees’ tenure at will. With most organizations currently outsourcing their jobs, it is becoming difficult for persons without formal education to retain their jobs. Most of these jobs are being contracted to persons who are self-employed.

Changes in employment relationship has bee attributed to increase in working hours in most organizations. Most of full-time employees have been found to work for over forty eight hours per week. With big number of employees working for more hours per week, it has been found that this is not according to their wish. According to data collected from full-time workers, it was found that one out of every four interviewed expressed dissatisfaction with the number of hours he or she worked (Wooden 2002, pp. 61-69). Despite this study being conducted on employees who currently work for over forty five hours per week, most of employees prefer the number of hours they used to work for in the past. Increase in number of working hours in most organizations has not been accompanied by increase in amount of salary or wages paid to employees.

Reference

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