While Australia’s economy has undoubtedly enjoyed the best economic outcomes of the last decade, this progress comes with a notable caveat. Yet economists and researchers across the country have expressed deep concerns over our country’s labor market—especially when it comes to full-time, stable employment. Emeritus Professor Bob Gregory from the Australian National University (ANU) does not mince his words about a major problem. Even after the micro-economic reforms of the 80s and possibly 90s, we still cannot get full time jobs created.
At the beginning of 2000, there were 6,624,700 full-time employees in Australia. This figure was a gain of only 391,600 workers over a ten-year span. This deepening underutilization is part of a wider pattern of negative impacts seen in the labor market, with manifestly stagnant growth in the booming jobs market. As Australia navigates its current economic landscape, the legacy of past reforms raises critical questions about the future of work and inequality.
A Legacy of Stagnation
The 1980s and 1990s were transformative years in Australia’s economy. This revolution can be credited to the stewardship of the Hawke and Keating Labor governments, and subsequent Howard Coalition government. All three administrations enacted a series of important supply-side economic reforms designed to improve productivity and spur growth. As Professor Gregory explains, the outcomes have been a wash.
For the last ten years or so, the land down under – the country of Australia – has been a great pin-up for neo-liberalism. We’re ignoring history, Gregory added, pointing out that despite huge increases in productivity, all of those advances have not been shared or paid for equally. He noted that “these policies have been broadly successful, at least as far as their effect on real economic growth has been concerned,” yet they have resulted in a widening gap in income and wealth.
By 2000, Australia’s total full-time employment finally exceeded the number of full-time jobs in 1990. Unfortunately, this important milestone took seven painful years to realize. This prolonged stagnation raises concerns about how those without full-time employment manage their livelihoods. Gregory posed a critical question: “How are those without a full-time job supporting themselves?”
The Rise of Underemployment
As Australia adapted through these economic changes, a clear trend developed in the country’s labor market landscape. By 2000, the levels of underemployment were much higher than they ever were in previous decades. This shift has left many Australians in precarious work situations, where job security is a constant concern.
New analysis by the Per Capita think tank revealed that young Australians are facing lifelong impacts from extreme wage stagnation. This period of stagnation, which lasted from 2012 until 2022, still haunts their financial well-being. This stagnation has deepened previous problems created by the neoliberal menu of reforms from the late 20th century. The neoliberal project has in fact failed miserably to deliver on its promises for the bulk of Australians. Brad DeLong has the story of this failure front and center in his 2022 book.
“The era of the neoliberal turn did deliver one thing out of what its salesmen had promised: it delivered a rapidly rising share of the rich in the distribution of national income,” DeLong emphasized, indicating that wealth accumulation has not translated to widespread prosperity.
Calls for Reform
Given all these compounding headwinds, it’s no wonder that Australian Treasurer Jim Chalmers has called for an urgent and meaningful tax reform. He understands, like so many of us, that these economic times require us all to reconsider policies that have led us to income inequality and a state of underemployment.
“Many of the things that people had taken, and do take, to be indicia of middle-class status… seemed more difficult to attain in the America of 2010 than they had been, at least in memory, back in 1979,” DeLong remarked, capturing the essence of disillusionment felt by many as they strive for middle-class stability.
The focus of talks in Australia’s economic round table have focused on the need for wholesale reforms to attack these inequities. Despite efforts to boost productivity through privatization and microeconomic reform across various political administrations, many Australians still find themselves struggling to achieve basic economic security.
“The burst of productivity growth in Australia in the 1990s has been accompanied by a widening of inequality in income and wealth,” Gregory concluded. This painful divergence underscores an urgent need to rethink our economic policies, so that they work more equitably for all Australians.
