Commentary on Political Economy

Thursday, 17 December 2020

 One of the most important tasks for left-wingers like us should be one of the hardest :  industrial sociology.  Unfortunately,  it is unpopular because it is hard. So, we are all the poorer, politically,  for our ignorance of it. Here is a useful example of the kind of revolutionary socialist efforts we need, instead of all that garbage about...identity politics...

Don’t blame gig economy for job insecurity, that’s only half the story

One thing we’ve learnt from the pandemic is that, for those who rely on evidence rather than anecdotes, what we believe to be The Truth keeps changing as we learn more. Take the way the medicos changed their tune on mask-wearing as more evidence came in.

It’s the same with the truth about job insecurity. The unions have gone for years claiming that work has become less secure, and in recent years the rise of the “gig economy” – where people get bits of paid work via a digital platform such as Uber or Deliveroo – means many people have found that claim a lot easier to believe.

But the training of economists says you should base conclusions about the economy on statistical evidence, not anecdotes or even personal experience. And the trouble is, a quick look at the Australian Bureau of Statistics’ figures for the labour force shows little sign of growing job insecurity.

‘For many casual employees there’s no real flexibility, only permanent insecurity,’ says Professor David Peetz, of Griffith University.

‘For many casual employees there’s no real flexibility, only permanent insecurity,’ says Professor David Peetz, of Griffith University.

The bureau doesn’t measure insecurity as such. Nor, since there’s no legal definition yet, does it even measure casual employment directly. But, since casual workers aren’t paid annual and sick leave, the bureau’s figures for those workers who say they aren’t eligible for paid leave are taken to be a measure of casual employment.

By this measure, although casual employment grew strongly to about a quarter of all workers in the 20 years to the turn of the century, that’s hardly changed in the 20 years since then. So where is all the growing insecurity?

Of course, since the big companies running the gig platforms on the internet have gone to great lengths to ensure the people getting work from them aren’t classed as their employees, they aren’t included among the casual employees.

No, they’d be counted as “self-employed”. But the figures show no great change in the proportion of workers who are self-employed over the past 20 years.

So where’s all this growing job insecurity we hear about? Short answer: buried much deeper in the figures.

Before we get to that, one thing we can say with confidence, however, is that though the gig economy is highly visible and gets much publicity in the media, it isn’t all that big relative to a labour force of more than 13 million people.

And, contrary to what some young people who spend too much time on their phones imagine, it’s highly unlikely that most work is in the process of moving to some internet platform. No, the issue of insecure employment is much bigger and wider than what happens to the gig economy.

One labour market expert who’s been working to explain why job insecurity is real despite its seeming absence from the stats is Professor David Peetz, of Griffith University.

In a piece he wrote for my second-favourite website, the universities’ The Conversation, in 2018, Peetz argued that the real causes of job insecurity aren’t the type of contract people are on – casual or permanent – but the way businesses are being structured these days.

These new organisational structures are designed to minimise costs, transfer risk from corporations to employees, and shift power away from employees, Peetz says.

Another part of his explanation is that the statisticians’ nationwide totals conceal changes in some industries but not others. (Other academics, from Curtin University, have used their own index of precarious employment to show that insecure employment is above average in the accommodation and food services, agriculture, and arts and recreation industries, but below average in the utilities, financial services, and public administration industries.)

Peetz says that “large corporations want to minimise their costs and risks, avoid accountability when things go wrong, and ensure products have the features they want.”

One instance of changing organisational arrangements is the dramatic increase in franchised businesses – where what looks like the local branch of some national chain is actually owned by a local small business person.

“The franchisee bears responsibility for scandals such as underpaying workers,” he says.

“Other corporations call in labour hire companies to take on responsibility for their workers. This cuts costs and transfers risk down the chain – which means jobs are more insecure.

“Most people working for franchises, spin-off companies, subsidiaries and labour hire firms are still employees. It’s more efficient for capital to control workers through the employment relationship than to pay them piece rates as contractors. That would run the risk of worker desertion or of shortcuts affecting quality.” (One powerful reason most of us won’t end up in the gig economy.)

In research published this month, Peetz drills into previously unpublished statistics from the bureau on casual workers to discover more of the elusive truth about “precarity” (my nomination for ugliest new word of the year).

He found that about a third of workers classed as “casual” because of their lack of leave entitlements worked full-time hours. More than half had the same working hours from week to week. More than half could not choose the days on which they worked.

Almost 60 per cent had been with their employer for more than a year, and about 80 per cent expected to be with the same employer in a year’s time.

Does any of that fit your mental image of what it means to be a casual worker? Get this: Peetz found that as few as 6 per cent of those we class as “casuals” work varying hours or are on standby, have been with their employer for a short time, and expect to be there for a short time.

Note that employers can usually dispense with the services of casual employees without giving them any notice, nor any redundancy payout.

“Overall,” Peetz concludes, “what I’ve found suggests the ‘casual’ employment relationship is not about doing work for which employers need flexibility. It’s not about workers doing things that need doing at varying times for short periods.

“The flexibility is really in employers’ ability to hire and fire, thereby increasing their power. For many casual employees there’s no real flexibility, only permanent insecurity.”

Ross Gittins is the economics editor.

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