On July 21, Scott Morrison’s Liberal-National government brought forward keenly anticipated announcements about Australia’s JobKeeper and JobSeeker payments, the wage subsidy and unemployment benefit that have kept millions from poverty during the worst depression in living memory. Morrison announced that although the payments will be extended beyond their previously legislated September deadline, the rates will be lowered and stricter eligibility criteria applied.
Under the new rules, from October to January 2021, eligible employers will be able to claim a two-tiered wage subsidy of $1,200 per fortnight for full-time employees. This will be reduced to $1,000 per fortnight from January to March 2021. For part-time employees working less than twenty hours a week, the payment will decrease to $750 per fortnight for the October to January period, and $650 per fortnight for the January to March 2021 period.
These changes seek to address the perceived “windfall” problem that arose under the previous JobKeeper rules, whereby some part-time workers received an increase in pay. Yet, then, as now, as many as 1.1 million casual workers and one million migrant workers remain excluded from the scheme.
For unemployed workers receiving JobSeeker, the fortnightly supplement of $550 that effectively doubled the payment will be reduced to $250 starting September 25. Recipients in partial employment will be allowed to earn up to $300 per fortnight (up from $106) before the payment is reduced. The scheme is extended only to December with no clear commitment of extension into 2021.
The lower JobSeeker rates are intended to incentivize a return to work, as are coercive “mutual obligation” measures policed by privatized job service providers. These will be reintroduced from August 4, as will penalties for compliance failures. The mutual obligation regime will force JobSeeker recipients to apply for four jobs per month, attend appointments and resume classes, undertake “work for the dole,” and accept any offer of employment irrespective of suitability — or face sanctions.
Given that there are currently thirteen JobSeekers for every available job, the swift return to punitive measures can only be explained as an attempt to demonize the unemployed. Meanwhile, the unemployment rate continues to soar, now reaching a two-decade high at an effective rate of 11.3 percent.
JobKeeper has been beset by problems from the beginning. First rolled out in April, the wage-subsidy scheme was initially counted at $130 billion, though the amount was later revised as costing just $70 billion in one of the biggest accounting errors in Australia’s history. The problems didn’t end there. Initial concerns that employers would simply pocket or skim the subsidy turned out to be well-founded.
As JobKeeper is not paid directly to workers, but to their employers, it was feared that many businesses would rort the subsidy or use it as leverage. These concerns were, in many cases, vindicated. One Adelaide worker’s contract was terminated but her employer continued to claim JobKeeper without her knowledge.
A hospitality worker reported “ghost” names on the company payroll — former employees that the business was now claiming the wage subsidy for. Despite the “one in, all in” principle, employers have successfully cherry-picked their preferred employees and discarded the rest, including those eligible for JobKeeper.
The United Workers’ Union has been contacted with hundreds of similar stories, and the Australian Taxation Office has investigated 1,800 employer breaches since March. Fraudulent employer behavior has been acute in industries plagued by wage theft and insecure work, including hospitality, contract cleaning, food manufacturing, and other essential industries.
At an institutional level, JobKeeper has enabled changes to the Fair Work Act and “flexibility agreements” that will likely outlive the pandemic. For instance, it was initially understood that no worker should experience a reduction to their hourly rate of pay, and would work the corresponding number of hours to “match” the $1,500 per fortnight payment.
However employers soon demanded recipients work full time in exchange for the publicly-funded minimum wage subsidy, irrespective of their hourly rate. The Fair Work Commission (FWC) subsequently determined this to be a lawful directive.
This means someone earning $50 per hour at the outset would have expected to work thirty hours per fortnight for JobKeeper. Now, they can be legally instructed to more than double their workload to seventy-six hours per fortnight, effectively reducing their earnings to the minimum wage.
Given this precedent, when the JobKeeper rate is dropped, it seems likely that many employees will be ordered to work full-time hours at $300 to $500 below the minimum wage. This compounds effective pay cuts imposed by the FWC annual minimum wage review of 2020, which mandated an increase at sub-inflation levels.
These changes place the Australian Council of Trade Unions and affiliated unions that campaigned broadly for JobKeeper extensions in a difficult dilemma. They must choose to either endorse a subsidy lower than minimum wage or change strategy entirely.
Since April, the FWC has also scrapped penalty rates for working from home arrangements, increased the notice time needed for industrial action, and granted a period of reprieve for employers that commit wage theft by “reducing the regulatory burden associated with proactive compliance.” These changes were limited by a September sunset clause that the prime minister now seeks to extend, citing the “inflexibility” of industrial relations arrangements before this crisis.
However it has become clear that already entrenched “flexibility” — a euphemism for precarious and casual work — has largely driven a second wave of COVID-19 outbreaks, particularly in Victoria, both harming our economic recovery and placing lives at unnecessary risk.
For months unions warned that without universal sick leave or paid pandemic leave, insecure workers would have no choice but to gamble their health and safety against their paycheck. Last weekend, Premier of Victoria Daniel Andrews reported that since mid-May, 80 percent of COVID-19 cases have been the result of workplace transmission. Vindicating union fears, these have been closely linked to casual workers who, lacking sick leave, had no choice but to work despite symptoms.
Or, take security workers at the center of the hotel quarantine scandal in Victoria. The breach has been identified as a major source of the second wave of the virus, and is now the subject of a judicial inquiry. Defying a media gag and risking their job, one worker spoke up about inadequate PPE equipment and training, as well as subcontracting practices that undermined conditions and led to quarantine breaches.
Security workers raised these concerns for months, but were ignored. Rather than reporting on this, the Australian media ran salacious and unfounded stories blaming the outbreak on security workers having sex with hotel guests. The predominantly South Asian migrant workforce, forced into dodgy subcontracting arrangements on flat rates of $20 per hour, were scapegoated for a failure that is better attributed to privatization, profit-seeking, and dangerous work conditions.
Workplace Health and Safety
The situation for school cleaners is no different. United Workers’ Union members Viviana and Isabel spoke publicly about their experience working in a Victorian public school. After a confirmed positive case on their site they requested a COVID-19 test and paid time off to await the results. Their manager replied “you look fine” and advised they could either take two weeks unpaid leave or move to a different school, potentially spreading the virus.
This is part of a broader pattern that is particularly pronounced in Victoria. Clusters of new cases are concentrated in working-class suburbs and industries such as meat and food production and warehousing. The often largely migrant workforce in these industries was once celebrated as “essential.” Now these workers are being blamed for workplace transmission.
In the logistics industry where union density and power is greater, companies are resisting worker-driven health and safety pushes. Earlier in July at a large supermarket distribution center in New South Wales, workers issued the company with a Provisional Improvement Notice — an important WorkSafe tool that enables health and safety representatives to resolve safety issues in the workplace. Despite a growing number of confirmed positive cases on site, the company successfully challenged the notice and overturned the cease-work order.
Despite employer intimidation, there have also been examples of powerful collective action. At a food processing facility in Victoria’s western suburbs, workers walked off the job for site-wide paid pandemic leave — and won. The action was taken after management attempted to conceal a positive case from production workers, sending only administrators and human resources personnel home to work in safety.
Industrial actions like these, while setting an important precedent, should not be necessary. And yet, the FWC still continues to delay a decision to grant paid pandemic leave to workers. To date only provisional unpaid pandemic leave, available only for particular awards and agreements, has been granted.
An Economic Failure
The prime minister has insisted that “these difficult times are not the product of economic failure but a global health pandemic.” But the experiences of insecure workers tell a different story. From cleaning to tertiary education, we rely on a deeply precarious workforce that cannot, and should not, absorb the tremendous cost of this crisis. This is the result of decades of restructuring that shifted risk away from capital and onto individual workers who are now at breaking point. It is an economic failure and it was entirely avoidable.
Worse still, Morrison’s changes to JobSeeker and JobKeeper signal a continued push to move greater numbers of workers into low-paid and insecure work. Narrowing JobKeeper eligibility is adding to already growing unemployment, producing an historically high reserve army of labor.
Many workers will be trapped between predatory job service providers that must be obeyed, and opportunistic employers looking to drive down wages. Rather than safeguard workers, the new changes to JobKeeper and JobSeeker are aligned to effectively erode workers’ freedom to reject substandard or inappropriate jobs.
This won’t only harm the unemployed and the poorest workers. Our collective public health — and our economic future — is only as secure as the most insecure worker. If we do not solve the problem of insecure work, our workplaces will remain sick for a very long time, endangering the community as a whole.