Recommended reading: Polices for transitional labour markets

The authors of From risk to opportunity: labour markets in transition argue that there has been a structural change in the workforce away from traditional families in which one adult is in full time employment (the concept of the traditional ‘male breadwinner’) while the other (usually female) undertakes domestic, unpaid work in the household. The shift away from this traditional dynamic has occurred as women have entered the workforce in large numbers and the nature of employment has changed to include a large component of part-time work.

The new regime can be understood by the divergence between ‘work rich’ houses, in which there is at least one full time and one part time worker, and ‘work poor houses, in which there is insufficient work or no work at all.

The authors identify a number of effects of the changes described above. First, the nature of income redistribution has changed from intra-family transfers between working husbands and non-working wives to transfers between working and non-working households through social security payments. Second, economic growth over the medium term has become ever more dependent on developing key ‘knowledge industries’ such as biotechnology, health, education, IT and so on.

The authors argue traditional policies have been premised on the a linear ‘life-course’ in which men went to school, then to work, and then retired, and women went to school, to work, got married, had children and then retired. They argue that life-courses now include numerous transitions around education, caring, full time and part time work, further education, possible retrenchment and unemployment and then retirement.

They identity five major life-course transitions which should form the basis of the new labour market policies. They are transitions between:

– education and employment;

– caring and employment;

– unemployment and employment

– employment and retirement;

– precarious and permanent employment.

The authors believe that such policies would be welcomed by both the employed and the un- and underemployed. They cite survey data in which those in employment indicated that they would like to work on average 2.4 hours less per week, accepting that this would result in reduced income. In 2004 this would have worked out to be approximately 20 million hours of work, which equates to roughly a full-time job for the half a million people then unemployed. There are clearly benefits if we are prepared to change our thinking.

The authors call for an ‘active approach’ to dealing with what they call ‘transitional labour markets’. This active approach should among other things allow people to move in and out of paid employment more easily and it should include financial assistance as well as training and care. They identify several aims for these policies including:

– to combine employment and other useful activities not valued on the market;

– provide a combination of wages, transfer payments and other income sources;

– ensure agreed entitlement; and

– finance employment and capacity building activities instead of unemployment.

Unlike the Government’s recent IR reforms, the policies which the authors call for are about reconnecting social goals and economic goals and introducing new forms of protection from the risks inherent in a transitional labour market. The Centre for Policy Development Policy Portal believes this is an important area of policy and welcomes contributions and comments in the forum on this and related topics.

The original oaper was put together by the Centre for Public Policy at the University of Melbourne, Deakin University, Brotherhood of St Laurence, CEDA, and the National Institute of Economic and Industry Research (NIEIR).

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