An economy that works for people

Transport Workers' Union (TWU) National Secretary Tony Sheldon's address to the 215 RTBU National Council.

Good morning comrades.

It's terrific to be back with old friends at the RTBU - I'm grateful for the opportunity to share some thoughts with you today about what's happening in the world of work. About the rapid and irreversible changes in the fundamental nature of work.

Speaking of work, I’ve been impressed by some of the work you’ve been up to lately – great results with Yarra Trams and Metro Trains Melbourne.  Well done to Bob Nanva and the whole team.

The catch cry of 'digital disruption' is on everyone's lips these days.  Whether it's Uber or self-serve checkouts, driverless cars or bricklaying robots, these changes are forcing us in the labour movement to rethink our approach to organising, to representation and to policy.  These changes are brought about by technology, and then jumped upon by businesses that have little interest in traditional workplace structures and little respect for national borders and regulations.

This presents unions, who've relied on longstanding settled assumptions about how work is organised, with enormous challenges but also great opportunities.  The challenge is how we adapt to these new modes of work to while sustaining high quality jobs with decent minimum conditions and best practice pay.  The opportunity, if we get it right, is higher living standards and a better work/life balance across the entire population.

I'd like to start today by going back, 50 years back to the middle of the 20th century.  Not to dwell on the workers' paradise or to reminisce about the good old days, but to remind you of a much-loved TV show from the 1960s, the Jetsons.  The Jetsons showcased the lives of George Jetsons and his family, who live in the futuristic world of Orbit City.

The show represented the best guess of the most creative minds of the 1960s as to what the future might look like. And what's remarkable is how much they got right.  Robots that can clean houses - tick.  Portable digital diaries that we can store personal information in - tick.  Even cities where pollution has become so bad that it's unhealthy to live - tick.

The power of technology to improve quality of life for everyone is recognised across the ideological spectrum.  Even a libertarian critic like Jeffrey Tucker, adviser to US Presidential candidate Ron Paul, acknowledges this power:

“…The whole [Jetsons] scene—which anticipated so much of the technology we have today but, strangely, not email or texting—reflected the ethos of time: a love of progress and a vision of a future that stayed on course ... The Jetsons' world is our world: explosive technological advances, entrenched bourgeois culture, a culture of enterprise that is very fond of the good life.”

Why am I telling you all this?

Because there's one aspect of the future the Jetsons writers got completely wrong.  All the terrific labour-saving devices they possess mean that the typical working week in Orbit City is three hours a day, three days a week.  Imagine that.  All this technological progress leading to LESS work?  Why would they have thought this when, as we know, the complete opposite has happened – we’re working more than ever.

The idea that technological progress would enable people to work less was not new to the Jetsons.  In the 1930s, the famous economist John Maynard Keynes speculated that people would move to a 15 hour working week as technology improved.  His logic was that once people had worked enough hours to fulfil material needs, they’d choose to spend the extra available hours on leisure time.  So much for that.

The hope that Keynes gives us is one of freedom.  Freedom that extends to everyone, freedom that ordinary citizens can enjoy.  Not just the theoretical freedom to fly first class, but the practical freedom to live a fulfilling life with a decent income, and quality time for leisure and relationships with friends and family.

What’s remarkable is how much this thinking has changed since Keynes and the Jetsons.  The default position of neoliberal economics, which dominates our economic thinking today, is that more working hours is unquestionably a positive development.  Longer hours generate more wages for workers (only if you don’t reduce rates!), and more importantly for the neoliberals, more profit for employers.  To get a sense of just how ingrained this thinking is, consider a critique made by The Economist magazine this month of Norway, one of the world’s most successful economies which consistently rates at the top of quality of life scorecards.  In The Economist’s view,

“…The [welfare] state is undermining the work ethic: most people enjoy a 37-hour working week, and three-day weekends are common.”

How terrible.  People are wealthy, happy and not working 60-hour weeks… clearly a disaster.

This prevailing view, held by The Economist and many others, prompts a number of questions about technology and work-life balance.  What’s the point of this new economy?  Do we serve technology or does it serve us?  Is it really possible to have an app as a boss?

It also presents us with a stark choice.  When Malcolm Turnbull became Prime Minister, he went out of his way to describe Australia as an open, innovative country that should be excited about its future.  This is true but to embrace this future, we must make a clear choice between the high road and the low road.  The high road of high quality jobs and living standards or the low road of poorly-paid insecure work.  As an aside, we’ve seen Alan Joyce at Qantas recently claiming how the company’s turnaround is the result of clever management rather than dumb luck.  Well, if they’re that clever, how come they can’t deliver profitable business performance while keeping quality jobs in Australia.

Qantas may have chosen the low road, but one thing to say about this choice of futures is that it can’t be avoided.  Digital disruption – the new economy and the technology change that drives it – is a fact.  We can’t fight it, and nor should we.  In our own industries, we already have driverless trains in Northwest Australia and driverless trucks on private mining sites.  There’s no going back on these technologies once the genie is out of the bottle.

But we were told by Keynes and the Jetsons that quality of life would improve with these changes.  Well it’s not.  Instead we’re seeing more outsourcing, more fragmented hours, less job security and lower wages and conditions. We’re in a wage recession - nominal wage growth has fallen each year since 2011, and real wages have actually gone backwards.  Unemployment is at 15 year highs.  Compared with 2002, we’re commuting an extra 56 unpaid hours per year.  So much for technology delivering a higher quality of life.

Well, let’s throw down the gauntlet then.  Let’s ask ourselves how can we make the digital economy work without wrecking people’s lives?  This means imagining what the new jobs will look like in Australia.  Will they be precarious jobs, like we see with Uber or 7-Eleven?  Or can we create new productive and high quality jobs.  That’s our great challenge.

Let’s take a look at what some other countries are doing in employment policy to maintain high quality of life.  You might have read about what’s happened recently in Sweden with the six hour day.  Swedish employers have begun experimenting with a six hour work day, instead of eight.  In retirement homes, hospitals and car makers, companies are testing the theory that productivity falls away dramatically in the last two hours of the work day, and so far the results are telling.

Toyota has been embracing this approach in Sweden for years now, and they report lower staff turnover, happier staff and higher profits.  Another employer in the technology sector noted, “To stay focused on a specific work task for eight hours is a huge challenge… At the same time, we are having it hard to manage our private life outside of work."  He believes the shorter work day would ensure employees have time and energy to enjoy their private lives once they leave work.

In both France and Germany, labour agreements have been signed to remove the responsibility of staff to attend to emails after they clock off for the day.  Some companies have taken this even further.  Both Daimler and Volkswagen have implemented software that prevents emails from being sent to employees while they are off-shift.

Of course, we should never forget the role of workers’ voice in bringing about these big leaps forward.  All these big European agreements have been struck through social dialogue, a process of creative tension where unions have brought propositions to the table backed up by the capacity to strike.  And in every instance, the performance benefits that unions promised to employers has been delivered.  They’ve been right every time.

So what kind of things could we embrace in Australia what would help us adapt to a rapidly changing world of work without compromising decent jobs and a high quality of life?  Well, we could start by investing in smart training policy and smart industry policy.  Thanks to deregulation, our training sector is currently a mess – not delivering for either trainees or employers.

And recent trade agreements make the problem even worse.  We’re told that the TPP and CHAFTA are about jobs, jobs, jobs, but what’s the point of opening up greater trade for our beef industry if the extra workers for the abattoirs are brought in from overseas on 457 visas?  Where are the new Australian jobs in that?  

In another industry, the software sector, the start-up Atlassian is an Australian success story with plans to list in the United States for several billion dollars.  It has repeatedly lamented the lack of qualified software engineers in Australia, and it says that up to a quarter of its Sydney-based staff are here on 457 visas.  Hardly a testament to Australia’s ability to create jobs in the digital economy.

What if we did it differently?  What if our trade agreements were accompanied by large-scale public investment programs to deliver skills to Australian residents in sectors expected to benefit from tariff reductions?  What if each 457 visa approval came with an obligation to invest a matching sum in training up a local worker, and had a sunset provision that meant a newly trained local worker must be employed in the position after (6/12) months?

And we could think much bigger on old-fashioned industry policy too.  Industry policy has got a bad name amongst the neoliberal purists at the Australian, but that doesn’t stop the US and Europe sponsoring large-scale aerospace industries or Dubai building a world-scale export and logistics hub.

After the deliberate demise of our car industry, Australia has a new opportunity to build a productive, high-tech sector with high-quality jobs.  It comes in the form of the submarine industry where Australia will be spending more than 20 billion dollars to purchase up to 12 state-of-the art subs.  As I’m sure you know, submarines are a hugely complex manufacturing challenge which generate enormous skilled employment.  They need steel and software and CAD and componentry – in fact, many of the things that our automotive sector offered before we gave up on it.

If Malcolm Turnbull is serious about embracing the exciting opportunities facing Australia, he could choose the high road by committing to building a world-class submarine industry in Australia along with high-quality training for Australian workers to staff it.  What a kickstart that would be for the workers of South Australia and beyond.  Decent jobs with decent pay, which focus on the quality of work, not just the quantity.  Our friends at the AMWU have been publicly pushing hard for exactly this outcome.

Mr Turnbull could buttress this by encouraging employers to trial a six-hour work day, like they do in Sweden.  He could commit to maintaining a high minimum wage, and safeguarding conditions. If we were truly ambitious, he could consider making it possible to combine lower work hours with higher living standards by embracing a Universal Basic Income, where all citizens receive a minimum income from the state to be topped up by whatever level of work they choose, as well as decent superannuation, carers’ leave, workers comp and parental leave.  This would have the added benefit of fixing all the rorts for the rich in our tax system overnight.

These are just a few of the ideas that would allow us to take the high road over the low in the new world of work.  What they have in common is that they seek to create an economy for all, which recognizes that a society is more than just the economy.  That’s a future we should embrace.

Thank you.