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Category Archives: mature workers

We are witnessing the emergence of a new working poor

Brian Howe April 20, 2012

The divide between blue and white-collar workers has become much uglier.

THERE is a new divide in the Australian workforce. It is no longer between the blue-collar and white-collar worker, but between those in the “core” of the workforce and those on the “periphery”. Those in the core are likely to be in full-time employment, either permanently within organisations, in management positions, or possessing skills for which there is steady demand and for which they can charge a premium. They are likely to have sick leave, paid holidays and in many cases parental leave above the government’s minimum standard. For them, flexibility means the chance to work in a variety of industries, to work overseas, to earn good money freelancing or in a secure part-time arrangement. Periods of unemployment are likely to be short or voluntary.

Those on the periphery are employed on various insecure arrangements – casual, contract or through labour hire companies, on low wages and with no benefits. Many do not know what hours they will work from week to week, and often juggle multiple jobs to attempt to earn what they need. Their skills are low, or outdated, and they are not offered training through work. They shift between periods of unemployment and underemployment that destroy their ability to save money. Their work is not a “career”; it is a series of unrelated temporary positions that they need to pay rent, bills and food.

For them, flexibility is not knowing when and where they will work, facing the risk of being laid off with no warning, and being required to fit family responsibilities around unpredictable periods of work. For many, life on the periphery is not a temporary situation; there is no pathway into the core. For the past six months I have been the chair of an inquiry, commissioned by the ACTU, into the phenomenon of insecure work. In hundreds of submissions, and during hearings around the country, we have come across a multitude of stories from people on the periphery.

Although 40 per cent of Australian workers are in insecure work, this is a development of the Australian economy that has avoided proper examination for too long. For people in their late 20s, with children and mortgages and no time to retrain; or older men in their 50s who have lost full-time work, this is their permanent position. Increasing numbers of workers are engaged in unpredictable, uncertain work that undermines their security.

Others fear that the loss of a good secure job will push them into the world of insecure work they see around them. This uncertainty makes people more sensitive to rises in interest rates, power bills and petrol prices. For the first time in our history since Federation, Australia is seeing the development of a working poor. As long as we can retain our relatively high minimum wages and public health system, we will not see the extremes of poverty of the United States, but we will see a society with families where one or both parents work, but who are unable to save or own a home, and remain vulnerable to the slightest financial crisis.

What this means for social mobility and social cohesion is the great unknown, and a subject that is only obliquely referred to in political debate. This is particularly the case when combined with a growing number of inter-generational jobless households. The economic changes of the past two decades cannot be unwound. But the unforeseen consequences of insecure work must be addressed to continue to produce jobs that will preserve the Australian social contract that has provided a decent welfare safety net, and a chance at social mobility, for generations of citizens and migrants.

Changes are needed not only to our employment and labour laws, but to the role of government and the social security and tax transfer systems, to education, training and labour market transitions and, yes, to our trade unions. We are witnessing the emergence of a new working poor

Brian Howe April 20, 2012

Brian Howe is a former deputy prime minister of Australia.

 This is an edited extract of a speech he gave to the National Press Club on Wednesday.

Read more: http://www.theage.com.au/opinion/society-and-culture/we-are-witnessing-the-emergence-of-a-new-working-poor-20120419-1x9z2.html#ixzz1sYkesXq6

Michelle Grattan
May 17, 2009

The Coalition has slashed Labor’s lead and Prime Minister Kevin Rudd’s popularity has fallen 10 points in an Age/Nielsen poll that also finds people don’t like the budget plan to raise the pension age.

Although most people believe the budget is fair and economically responsible, fewer are happy than with last year’s budget. Significantly more (38 per cent) say they personally will be worse off.

Labor’s two-party vote has fallen five points since March to 53 per cent, while the Opposition has risen five points to 47.

The poll is a reality check for the Government, and should scotch speculation about an early election.

Although they will hearten Opposition ranks, the figures still only take the Coalition back to its 2007 election position.

The Coalition’s primary vote has jumped six points in the past two months, with Labor falling three points. The ALP is now only one point ahead on primaries — 44 to 43 per cent.

This is the highest primary vote the Coalition has had since the election, although last September, with a lower vote, it led Labor on primaries.

In Victoria, the Coalition is five points ahead of Labor on primary votes — from being 20 points behind in March.

Mr Rudd’s approval is down sharply from his peak of 74 per cent but remains at a high 64 per cent; his disapproval has risen 10 points to 32 per cent. Opposition Leader Malcolm Turnbull is steady on 43 per cent approval and 47 per cent disapproval.

Mr Rudd has fallen five points to 64 per cent as preferred PM and Mr Turnbull is up four points to 28 per cent.

The national opinion poll of 1400 was taken from Thursday to Saturday.

Pollster John Stirton said that while Mr Rudd’s approval had dropped significantly, John Howard’s approval during his years as prime minister was 64 or better only four times.

Only 40 per cent backed the big budget surprise of a rise — phased in between 2017 and 2023 — from 65 to 67 in the eligibility age for the pension. This is designed to help finance the higher pension rate, boosted in the budget, for an ageing population. The increase was opposed by 56 per cent.

The budget was seen as fair by 56 per cent (down one point compared with the response after last year’s budget); 62 per cent were satisfied with it (down four points), while 52 per cent thought it economically responsible, and 38 per cent said it was not.

People feel notably more disadvantaged by this year’s budget than they did by the first Swan budget. There has been an eight-point fall on a year ago in those who say they will be better off (23 per cent), and an eight-point rise in those believing they will be worse off (38 per cent).

Mr Turnbull confirmed yesterday that the Opposition is set to let through the Government’s $1.3 billion alcopops legislation from last year’s budget, rejected earlier this year, which comes back into Parliament next month. It had been expected to become “trigger” legislation if the Government decided to have a double dissolution.

“We’ve got to take into account the budgetary environment has changed,” Mr Turnbull told Channel Nine. “Last year the budget was solidly in surplus, this year we have a record deficit.”

But the Coalition will vote against the means test on the health insurance rebate, which is worth $1.9 billion over the budget period.

Mr Turnbull said the means test was “an ideological political move to attack private health insurance and had nothing to do with budgetary or financial necessity”.

Treasurer Wayne Swan said he had always had private health insurance, “but I don’t expect to be subsidised by taxpayers on low and middle incomes, many of whom can’t afford private health insurance themselves”.

http://www.watoday.com.au/national/rudds-popularity-dives-over-new-pension-age-20090517-b7d2.html?page=-1

Adele Horin
May 14, 2009

“I’m jack of it “…sewer repairer Richard Bishop wants to retire but the later eligibility for the age pension will affect his plans. Photo: James Brickwood

RICHARD BISHOP began working at 14 and after decades of hard manual labour he is keen to retire as soon as possible.

“I’m jack of it,” said the 57-year old who repairs sewers for a living. “I’ve just had a knee reconstruction and by the time I’m 60 I don’t think I’m going to be getting any better. I want to enjoy what I’ve got left.”

Mr Bishop’s plans to put his feet up have been derailed by the Federal Government’s plan progressively to raise the pension eligibility age to 67 from 2017.

He admits the plan will hurt him and he is not alone – most Australian workers will not applaud the initiative, according to social researcher Julia Perry.

“Employers don’t want older workers, and a lot of mature-age workers want out, too,” said Ms Perry, who produced the Too Young To Go report on older workers for the NSW Government.

To prefer to work beyond 60 has always been a minority taste. At most, 25 per cent of mature-age workers enjoy their jobs so much they want to keep going beyond the usual retirement age, research consistently shows. “Only a minority of workers have the kind of job that is exciting or fulfilling,” said Sol Encel, emeritus professor at the University of NSW who is an expert on the ageing population. “Work is a chore for most people, especially as they age.”

Yet most experts agree the decision to lift the pension age is a necessity in the absence of higher tax rates to fund burgeoning health and aged care services, as well as pensions and superannuation concessions for a greying population. Australia is following a trend set by the US, Germany, Iceland, Norway and Denmark. In Britain 68 is the age for pension eligibility.

Australia’s plan will affect workers now aged 57 or younger. Those aged 55.5 to 57 will not be eligible for a pension until they are 65.5 and those aged 52.5 or younger not until 67.

Australians appeared to be resigned to their fate, Professor Encel said.

In the past decade, workers have reversed the trend to early retirement. Since 1998, the proportion of men aged 60-64 in the workforce has risen from 43 per cent to 52 per cent, and the proportion aged 65-69 has jumped from 19 per cent to 27 per cent, with most working part-time. For women the proportion of those aged 60-64 in work has almost doubled to 36 per cent.

But most, Professor Encel said, were economic conscripts. “The boomers have come to realise they don’t have the money to retire at 60. They’ve got responsibilities upscale and downscale – ageing parents and dependent children,” he said. “And they know if they have to rely on the pension, they’ll suffer a dramatic drop in lifestyle.”

Ms Perry said it was regrettable to compel low-skilled and low-paid workers, many with health problems, to work longer for the pension if highly skilled workers continued to be able to retire early by accessing superannuation at 55 or getting it tax free at 60.

The Henry review of the tax system recommended the preservation age for super be aligned with the age pension age.

If employees are expected to work longer, employer attitudes will need to change, experts say. “It’s a good idea to encourage people to work longer but you have to encourage employers to employ them longer,” Ms Perry said.

David Murray, 57, a company director, said though he was unlikely to be affected by the change in the eligibility age, he had lost retirement savings in the downturn. “Most people have lost 25 to 30 per cent of their retirement funds, so it’s going to take them another four to eight years before they can start to recoup some of that. Most retirements have been pushed out anyway.”

with Jonathan Dart

http://www.smh.com.au/national/too-young-to-retire-and-too-old-to-work-20090513-b3dt.html?page=-1

Misha Schubert, Daniella Miletic and Peter Martin
May 14, 2009

AUSTRALIANS could be forced to wait until they are 67 to get access to their superannuation savings under a radical proposal to be considered later this year by the Rudd Government.

A day after flagging a rise in the pension age to 67, the Government has confirmed it will look at introducing the same age limit for super access – in effect making 67 a universal minimum retirement age.

Bringing the superannuation age into line with a higher pension age was recommended by Treasury secretary Ken Henry in a review published with the federal budget papers on Tuesday.

Dr Henry’s plan, for a phased lifting of the super age from 60 to 67 from 2024, is part of a broad push to keep Australians at work longer to help the nation cope financially with its ageing population.

A spokesman for Treasurer Wayne Swan said the Government would “thoroughly assess the findings of the Henry review when they are delivered at the end of the year”. But he stressed that the super issue would not be considered before then.

The plan could be even more controversial than the budget decision to lift the pension age.

Jane Chisholm, 53, was unhappy enough at the idea of having to stay in the workforce beyond 65 before she could even think about applying for the age pension.

“They are finally getting us baby boomers back, I guess,” said Ms Chisholm, marketing manager of Gasworks Arts Park in Albert Park.

But she expressed stronger misgivings at the proposal to lift the super access age. While she understood the need to prepare the nation for people living and working longer, she said the super proposal was cruel.

“People like to think they could have control of the money that is there for their retirement,” Ms Chisholm said. “If you want to go travelling and do some of the things you want to do, it’s just putting it closer to the 70 mark, when you can’t count on your health.”

The move to raise the pension age sparked fierce debate, with critics saying it would entrench inequality and force more old people into poverty.

Mr Swan said the decision was needed to keep pensions sustainable. “Currently we have five workers in Australia for every person aged 65 and over and by 2050, that will be 2½,” he said in a post-budget interview.

“Life expectancy has increased by 23 years since the age pension came in,” he said. “Twice as many people are going on it for twice as long.”

Opposition Leader Malcolm Turnbull supported the pension age increase, saying his only concern was that it would not come in soon enough.

National Seniors also backed the move, noting that it would not come in until 2023.

But critics highlighted the contrast between the rich getting access to super at 60 (at least under existing rules), while the poor were being forced to work or stay on the dole until 67.

The Combined Pensioners and Superannuants Association warned the move would add to poverty among over-65s and force some to toil longer at hard physical labour. “People in their 50s and 60s are often unable to find adequate employment,” said the association’s policy officer, Charmaine Crowe.

But she backed the idea of aligning the pension and superannuation ages, saying it would ensure more equality between richer and poor retirees, keep skilled people in the workforce longer and boost super savings.

Sydney University workplace relations centre analyst Michael Rafferty said increasing the pension age would entrench inequality and force some of the hardest working people in the world to work even longer.

He also pointed to what he said was a disparity between the pension decision and the mild cuts in the budget to tax breaks on superannuation. “The rich have been hit with a feather duster and the poor have been told you are going to work longer and harder,” he said.

Australian Council of Social Service chief Clare Martin said lifting the pension age to 67 might disadvantage “lower-income, mature-age people with limited job prospects, who will have to remain on lower income support payments for longer”.

UNSW Centre for Pensions and Superannuation deputy director John Evans said the pension age rise was a “knee-jerk” decision that could damage the vulnerable.

But Brotherhood of St Laurence chief executive Tony Nicholson said raising the pension age was inevitable to ensure the long-term sustainability of the system.

David Knox, a partner at Mercer Consulting who proposed the 67 pension age in a paper prepared for the Committee for the Economic Development of Australia, also welcomed the decision.

But he expressed dismay at the proposal to lift the super preservation age to 67.

“The superannuation access age should generally be about five years younger than the pension age in order to provide flexibility. You cannot assume that everyone will retire at the same age, in fact today most people retire before 65.”

Superannuation access is at present available at 55, with the age set to climb to 60 by 2024. The Henry Review recommends a further staged increased to 67, after which it would remain aligned with the pension age in order to stop Australians spending their super payout quickly and then getting access to the part-pension.

http://www.theage.com.au/national/push-to-lock-up-superannuation-savings-until-age-67-20090513-b39y.html?page=-1

Tim Colebatch
April 20, 2009

OLDER workers have continued to stream into the workforce in the past year even as jobs grow more scarce and unemployment rises sharply among the young, figures show.

Data released by the Bureau of Statistics show that while people aged under 25 lost 91,500 full-time jobs in the year to February, people over 50 added 104,000 full-time jobs.

More unexpectedly, while the number of under-25s who were unemployed or out of the workforce shot up by 129,000 over the year, the number of over-50s unemployed, retired or taking time out shrank by 3000.

That means more older people went back to work over the year — no doubt largely because plunging sharemarket values and interest rates have slashed their life savings and/or retirement income streams.

By February 2009, 30 per cent of men aged 65 to 69 were working, and 58 per cent of those aged 60 to 64. Employment rates were much lower for women, but even so, 14 per cent of women aged 65 to 69 were in work, and 38 per cent of those in their early 60s.

While unemployment rose by 187,000 over the year, the figures show just over half of that was concentrated among the young.

Unemployment rose to 17.7 per cent among those aged 15 to 19, 8.8 per cent among those 20 to 24, and 6.6 per cent among those 25 to 29 — but was 3 to 4 per cent among age groups between 45 and 64. The data came as figures show:

? The number of Australians travelling on domestic flights has declined year on year for the first time in six years, as aviation falls victim to corporate and household spending cuts.

Passenger numbers declined 5.3 per cent, from 3.88 million in February 2008, to 3.68 million a year later. The sharpest falls were in flights to or from Cairns (down 8.8 per cent), the Gold Coast (8.5), Sydney (7.1) and Melbourne (6.5). Qantas this week announced plans to cut up to 1750 jobs.

? Export prices fell 4.6 per cent in the March quarter, as the Australian dollar regained strength and global prices plunged for food and processed minerals, and import prices fell 2.8 per cent, due to falling oil prices.

Economists told Reuters that this week’s figures would show the inflation rate down to 2.8 per cent, with consumer prices up 0.5 per cent in the March quarter.

http://www.theage.com.au/national/more-over50s-take-on-jobs-20090419-abfg.html

Reposted (url below) April 10, 2009 02:29 PM ET | Michael S. Wade | Permanent Link | Print

Michael Wade

One of the most frustrating things a job seeker can encounter is the objection that he or she is overqualified.

“What am I supposed to do?” they ask. “Hide the fact that I have ten years of experience, or that I have a graduate degree?”

Put me down on the side of the applicants.

Some employers may argue that the overqualified applicant will get bored with the less demanding or lower-paid work and soon move on. Who can deny that happens? On the other side, however, are some points that deserve more attention:

1. There may not be that big of a difference between the turnover rates of the overqualified employees (especially in this job market) and the less qualified ones. It can be better to have an experienced performer for four years than a so-so one for five.

2. The employer will have to spend less time training the seasoned employee. That’s a savings right there.

3. The more experienced/better trained employee will be producing at a high level much sooner than the less qualified counterpart and can bring some valuable insights gained from hands-on performance.

4. The overqualified employee may want to stay in a position that provides less stress and more time for the family. Not every person who was a manager or supervisor loved the experience. Many want a position that is less likely to dominate their weekends and home life.

5. There is the danger that a failure to select the overqualified applicant will be perceived as age discrimination. This depends, of course, upon the individual case, but the overqualified objection may be a cloak to hide illegal bias.

6. Having experience elsewhere does not automatically produce a reluctance to accept how things operate here. It may even carry a greater knowledge of an employer’s expectations.

In tight economic times, organizations are going to be seeing more applicants who far exceed the basic job requirements. It makes no sense for hiring departments to place a stigma on the overqualified. Doing so excludes a pool of extraordinary talent.

Michael Wade writes Execupundit.com, an eclectic combination of management advice, observations, and links. A partner with the Phoenix firm of Sanders Wade Rodarte Consulting Inc., he has advised private and public-sector organizations for more than 30 years.

http://www.usnews.com/blogs/outside-voices-careers/2009/04/10/lets-drop-the-overqualified-objection.html?goback=%2Ehom