A turning point for labour market policy in Australia

Australian labour market and industrial relations policies are poised for fundamental change. A combination of political and macroeconomic factors has created a historic opportunity to turn away from the individualised, market-driven labour market policy that has prevailed since the 1980s, in favour of a more interventionist and egalitarian approach. Factors contributing to this moment include the breakdown of bipartisan consensus around key neoliberal precepts; growing public anger over inequality, insecure work and stagnant wages; and a weakening of macroeconomic conditions. Australia’s labour market is now marked by underutilisation of labour in various forms, a deterioration in job quality (especially the growth of insecure and precarious work) and unprecedented weakness in wages. The deterioration in job quality and distributional outcomes is the long-term legacy of the post-1980s shift away from Australia’s earlier tradition of equality-seeking institutional structures and regulatory practices. The current malaise in labour markets should be confronted with a comprehensive strategy to both increase the quantity of work available to Australian workers and improve its quality. The major components of such a strategy are identified, and their prospects considered, in light of the economic and political forces reshaping Australia’s labour market. JEL Codes: J28, J38, J53, J58, J83