Australian jobs figures show acceleration of “gig economy”
19 September 2020
An enormous economic and social crisis is developing in Australia. Unemployment is continuing at Great Depression levels and poverty is about to worsen dramatically as the government cuts income support payments in order to drive people into low-paid work.
As is happening globally, governments and employers are exploiting the mass unemployment triggered by the COVID-19 pandemic to bludgeon ordinary people back into workplaces, not only in unsafe conditions, but on reduced wages and conditions.
Workers line up outside a Centrelink office in Melbourne [Credit: @LordSedgwick Twitter]
That is the real content of the official jobless data released last Thursday. The statistics show a sharp rise in the numbers of unemployed workers already being pushed into insecure contract work, particularly in the super-exploited “gig economy” workforce, such as uber and food delivery drivers.
Touting the decline in the seasonally adjusted unemployment rate from 7.5 percent to 6.8 percent last month, Treasurer Josh Frydenberg boasted of the “remarkable resilience” of the Australian economy. Yet at the same time, he demanded greater “flexibility” in the labour market, supposedly to create “jobs, jobs, jobs.”
The reality is that even on those vastly-understated figures, nearly one million workers remain jobless and actively seeking work. And as Frydenberg admitted, when those who are on “zero hours” or have dropped out of the workforce, are counted, the “effective” unemployment rate is 9.3 percent, or 1.26 million workers.
Another 3.5 million workers are still on the Liberal-National government’s JobKeeper wage subsidies. Many of their jobs will be eliminated in the coming weeks, despite employers having been bailed out to the tune of about $400 billion by federal and state government “stimulus” packages.
What Frydenberg did not mention is that almost the entire rise in official employment in August—a 44,500 net increase in non-seasonally adjusted terms—resulted from the 50,200 growth in the number of self-employed people without employees (such as “sole traders”).
By contrast, there was minimal growth in the number of employees—just 2,600—offset by a 9,300 decrease in the number of “contributing family workers.” Payroll jobs (employment for a wage) actually fell. Overall working hours rose barely, by 0.1 percent, showing that workers’ hours, on average, are still being reduced.
Some of the rise in self-employed workers may be accounted for by sub-contractors. But corporate economists advised their clients that practically all those “non-employees” were working in the gig economy.
“Delivery drivers, and riders, of major online delivery services are not employed by their respective delivery companies,” Deutsche Bank economist Phil O’Donaghoe wrote in a note to clients. “They are, in effect, ‘self employed’ contractors.”
O’Donaghoe added: “[I]t is fair to infer that many of those new workers hardly worked for many hours (given the paltry rise in overall hours worked). That leaves us describing this as a poor employment print, despite the headline.”
Many of these “gig economy” workers are young. They include the more than two million casual workers, international students and other vulnerable visa holders who have been excluded from the government’s JobKeeper wage subsidy scheme and JobSeeker unemployment benefits.
Millions more will soon be confronted by the same dire plight, as the government cuts the levels of the JobKeeper and JobSeeker payments from September 28, just as banks and landlords move to end six-month moratoriums on mortgages and rental evictions.
Official Australian Bureau of Statistics data reported that the unemployment rate among 15-24 year olds was 14.3 percent—more than twice as high as the overall average.
The figures also indicated that part-time work now accounts for almost half the workforce. Seasonally adjusted full-time employment increased in August by 36,200 to 8.58 million, while part-time employment increased 74,800 to 3.99 million people.
Some economists, such as UBS Australia’s George Tharenou and Carlos Cacho, are forecasting that the official jobless rate will rise “sharply” as businesses collapse. “However, since the government extended temporary bankruptcy protection, and protection for directors from trading insolvent, for 3 months to Dec-20, we now expect the peak in unemployment to be later, perhaps not until 2021,” they wrote in a report.
According to the more realistic jobless data published monthly by the Roy Morgan company, unemployment stood at 13.8 percent, or almost two million workers, in August. The total of unemployment and under-employment was 22.8 percent, or 3.27 million workers. That is as high as the 1930s.
The Roy Morgan survey also showed that this toll was not confined to the state of Victoria, where the government and the corporate elite are demanding the rapid ending of a “stage 4” pandemic lockdown in the capital Melbourne.
Even these estimates do not take into account the current avalanche of job cuts by public universities. Last week, three universities alone—Melbourne’s RMIT University, the University of New South Wales and the Australian National University (ANU)—announced a total of nearly 2,900 job losses.
Some idea of the financial stress and impoverishment to come can be gauged from a recent ANU study. It calculated that since March, the JobKeeper subsidies and the temporary doubling of JobSeeker benefits had saved about 2.2 million people from poverty.
Without these payments, the number living in poverty would have soared from a pre-COVID total of 1.6 million to 3.8 million—or about 15 percent of the population.
The study estimated that just by cutting the JobKeeper and JobSeeker rates from September 28, the government would push an extra 740,000 people into poverty, initially lifting the total to 1.84 million.
On that date, JobKeeper will fall from the minimum wage level of $1,500 to just $1,200 per fortnight, and to $700 for those who previously worked less than 20 hours per week.
The payment to people on JobSeeker and related benefits will fall by $300 to $815 a fortnight. On December 31, JobKeeper will be reduced to $1,000 and $650 per fortnight and JobSeeker to $565.70, well below the poverty line, defined as a fortnightly disposable income of $832.
While gloating about the unemployment statistics, Treasurer Frydenberg announced ramped-up job search requirements for people on JobSeeker. From September they will have to apply for up to eight jobs a month, and participate in “job search plan” meetings with an “employment services provider.” Yet, there are, on average, 13 JobSeeker recipients for every advertised vacancy.
The government intends to use this “welfare compliance” regime to cut people off benefits and dragoon them into low-paid work. Jobless workers’ payments were suspended 2.3 million times in 2018-19.
Frydenberg said changes to industrial relations laws had boosted job creation. “Through the JobKeeper changes we introduced we brought more flexibility in the labour market including changes around duties, around hours and around location of work,” he said.
These changes, agreed by the trade unions, and rubberstamped by the Labor Party opposition, allowed employers to cut workers’ hours, and alter their job duties and locations. Having propped up the government and big business by imposing these attacks and other cuts to conditions on millions of workers, the unions are going further to enforce this “flexibility.”
Frydenberg hailed, as a “positive development,” that Australian Council of Trade Unions (ACTU) leaders have been collaborating behind closed doors for weeks in five “working groups” with the government and employer groups to scrap more of workers’ basic rights.
This week, ACTU secretary Sally McManus reportedly finalised a deal with Business Council of Australia chief executive Jennifer Westacott, representing the largest companies. They propose to axe the “better off overall test” for registering a workplace pay deal, clearing the way for enterprise agreements to openly reduce the conditions of workers.
In return, union-negotiated agreements will be fast-tracked through the Fair Work Commission, taking to a new level the decades-long corporatist partnership between the unions and the financial elite.
Amid growing social inequality, unsafe conditions and social misery, the scene is set for a social explosion. The crucial issue will be for workers to mobilise independently, against the unions, as well as the governments and the corporate elite. This means turning to a revolutionary socialist program to take political power and reorganise society on the basis of human need, not private profit and wealth.
If you are a Shipt Shopper and would like to share your story, email firstname.lastname@example.org.
Target announced Monday that it would offer more than 350,000 frontline employees a $200 bonus each, or $70 million in total.
Target previously gave all hourly full-time and part-time store and distribution center workers $200 bonuses in July. Eligible employees include hourly members in stores and distribution centers, seasonal hires, and hourly team members who “support Target’s guest and team member contact centers.”
Meanwhile, some gig workers for Target-owned delivery service Shipt held a demonstration Monday outside of the company’s headquarters in Minneapolis protesting a new pay model.
Pay for Shipt workers, called Shoppers, is now determined using an algorithm rather than a flat rate, the company confirmed to Business Insider. Shipt classifies Shoppers as independent contractors who are not eligible for employee benefits, including minimum wage or healthcare.
Some Shoppers have said the algorithmic pay model has lead to lower wages. Molly Snyder, the chief communications officer for Shipt, said Shoppers make $21 per shop including base pay, promo pay, and tips, which did not change on average during the new pay model, but some workers may have seen a decline in pay. Snyder also said there were more Shoppers for Shipt “than ever before” last weekend.
One study, conducted by Coworker.org and an MIT PhD student, found the new pay model resulted in lower pay for 41% of Shoppers, and the number of people earning less is growing.
Willy Solis, a Shipt Shopper and a lead organizer with the grassroots organization Gig Workers Collective, said it felt insulting that Target give bonuses at the same time Shipt Shoppers are calling for fairer pay. Solis said Shoppers were a part of why Target was able to enjoy 273% annual growth in same-day service sales — including curbside pick up, drive up, and Shipt.
“We’re grateful and happy for Target employees to be recognized and for receiving that extra pay, but at the end of the day, we as Shipt shoppers have contributed significantly to make Target a very profitable company,” said Willy Solis, a Shipt Shopper and a lead organizer with the grassroots organization Gig Workers Collective.
Become an employee with full paid benefits, or remain a mostly independent gig worker? That debate’s raging in California as November’s general election approaches, and its outcome is likely to affect the entire country.
According to The Washington Post, “Uber, DoorDash and other gig economy companies are bombarding TV airwaves, social media and even their own apps with ads and marketing materials promoting a ballot initiative [Proposition 22] that they say would improve drivers’ financial situation and working conditions but that would also deny them the right to be classified as employees in California.”
Proposition 22 would give gig workers limited benefits and wage and worker protections, but establish them as an independent class of workers – and undo a 2019 California law, Assembly Bill 5 (AB5), that “would guarantee drivers access to the minimum wage, employer-provided health care and bargaining rights.”
I’ve long been self-employed, with the exception of some recent cybersecurity consulting contracts in which I was paid as a full-time employee with benefits, but that’s been my choice.
Being fully self-employed is not for the faint of heart. Besides cybersecurity consulting and writing a newspaper column, I have an apartment-rental business. I recently earned a real estate license and am selling properties, too.
I manage my own invoicing and taxes. I know to the penny – once my CPA explains it to me and I drop whatever mug of coffee I’m holding – how high my income taxes are. Few employees are aware of how much they pay in taxes or what their benefits cost their employers – which would be helpful to know before voting for new government policies that will increase both.
I manage my own health care insurance, which has gotten plenty expensive in recent years for individuals who don’t qualify for subsidies, in part because of government attempts to expand health insurance to everyone.
But, again, I choose to be self-employed. I like the freedom it provides. But it also makes me keenly aware of the unintended consequences of government regulations and policies.
California’s 2019 AB5 law would require Uber, for instance, to hire drivers as full-time employees with health insurance, paid sick leave and other benefits. Benefits are wonderful, but come at a price.
Uber claims that “if the company were forced to make all drivers across the country employees, for example, it could only support 260,000 full-time roles,” reports The Post. “That compares to 1.2 million active drivers the company was hosting on its app before the coronavirus pandemic.”
Uber also says fares would increase and drivers would be less available and timely – which means you might have to wait a while for your ride home to arrive after a night of enjoying the pub.
What it comes down to is that some politicians believe individuals shouldn’t have the freedom to exchange their skills and services for money from organizations, because organizations take advantage of those individuals. Joe Biden and Kamala Harris support AB5, not the watered-down Proposition 22.
Others think that in a free society, individuals should be able to offer their professional talents to anyone willing to pay for them, and government shouldn’t restrict the terms they negotiate. President Trump’s campaign supports that approach and is critical of AB5 (but has not, to my knowledge, supported Proposition 22).
That’s something else to think about when you vote in November’s election.
TOM PURCELL is a Pittsburgh Tribune-Review humor columnist and is nationally syndicated. Readers can contact him at email@example.com.