Inequality and workforce casualisation – a Piketty perspective

Over the last 2 weeks, I have twice been asked for commentary on workforce casualisation.  The first time for the ABC’s Canberra morning program (20 June) and Tuesday night (5 July) between 10 and 11pm, for the ABC’s Nightlife program broadcast nationally. This extended session was undertaken with Melbourne University’s Professor Mark Wooden and included talkback from listeners. The podcast is here.

While “jobs” of course were a major area of raw promises during the election, there wasn’t any talk about what type of jobs or the quality of jobs by any of the candidates or parties.  I wrote an article on just this for the 2013 election. While much recent jobs growth has been part time rather than full time and underemployment is high at around 8% (in addition to 5.7% unemployment)  in Australia, there wasn’t really debate about any of this in the election.

The term casualisation implies a process in train or in transition to a workforce that offers less permanent, secure jobs and more casual, short term jobs. In fact, as Professor Wooden pointed out in Tuesday night’s session and in this Conversation article, casualisation as a process in Australia is over. Australia’s tally of casual workers defined by the ABS as those lacking paid leave entitlements, has remained pretty much at around 20 per cent of the employed workforce for the last 20 years. So it is not in train, it has happened. This can lead to something of an outlook along the lines of ‘getting over it’ or ‘getting on with things’ the way they are, even seeing an opportunity or advantage in this aspect of flexibility in our employment landscape.

However, a highly casualised workforce which we now have in Australia is a continuing cause for concern at many levels and as such rightfully needs to be kept on the public policy agenda.  I have written widely about casual and insecure employment and made a number of conference presentations. It was the subject of my PhD thesis. My research and writing document the implications of casual and insecure jobs in people’s lives, how they got into those jobs and the likelihood of getting out of them into something better. It was not an optimistic scenario. But my thinking about casual employment has been further advanced of late by one critical reading – Thomas Piketty’s Capital in the 21st Century.  

Needless to say, there is much to be taken from Piketty’s book which examines the drivers of contemporary inequality in historical perspective and the increasing concentration of wealth in the upper 10% of income groups in many countries and further concentration in the upper 1%, .1% and .01%.  My interest was especially piqued in what he had to say about wage inequality. He doesn’t talk about precarious or casual employment per se but in a sense that doesn’t matter. What is important is that wage inequality has grown considerably over recent decades in large part due to the tremendous takings of managers at the upper echelons in employment hierarchies with stagnant wage growth for the rest. This begs the question of the role of casual employment in fostering these outcomes.

Regardless of how adequate the minimum wage is, and Australia’s is relatively high by international standards, the high rate of casual employment has a dampening effect on wage growth through a variety of ways. For a start a good hourly wage rate doesn’t mean that a worker  derives an adequate income. That is entirely predicated on the number of hours worked. With 8% of the workforce reporting insufficient hours of work, it is reasonable to assume this is because they don’t make enough income from the hours of work they do have. The high rate of casual work in Australia linked to the related dimension of insufficient hours contributes to income inequality.

A second factor in how casual work contributes to inequality is that it is not positively linked to occupational mobility.  While casual jobs can lead to permanent jobs, (as explained in this paper) depending on various factors, there is also a high rate of transition to joblessness and a high rate of long term continuity in the casual job. Piketty confirms that there is considerable delusion about the extent of upward social and economic mobility based on ideals of a meritocracy in contemporary societies. In fact, there is much entrapment in low end jobs, and fewer opportunities for advancement than we like to think.

Casual workers are less likely to be unionised so they have low levels of representation and voice. My own research also showed how disempowered casual workers can be in terms of control over their work and work schedules. These factors also have an effect on income inequality. Piketty discusses the tremendous advantages in terms of setting their own pay that the supermanagers in many enterprises are able to leverage – almost the reverse situation of the average isolated casual worker unable to predict if she will have sufficient hours of work to get by tomorrow or next week.

Casual employment certainly plays an important role in fostering inequality in Australian society and is interconnected with the nature of Australia’s social welfare system in terms of low level benefits and tough welfare to work  requirements. How these issues will play out in years to come and in relation to the next government in Australia’s parliament remains to be seen.










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