Australia‚Äôs surprisingly secure workers

Writing in the SMH this morning, Labor MP Tanya Plibersek says:

…job insecurity is bad for workers’ health. Fran Baum from Flinders University followed the fate of Mitsubishi Motors workers who faced losing their jobs. Their health was clearly affected by the insecurity. These new work laws, which make it easier to sack workers, may contribute to worse health in companies that threaten to make use of the new provisions. Employees in companies with fewer than 100 employees can now be sacked for any reason, or no reason; and companies with more than 100 employees can be sacked for anything as long as it’s called an “operational reason”.

I’ve no doubt that the prospect of losing one’s job is stressful (I remember election night in 1998…), and sustained stress can contribute to poor health. The issue that interests me here is whether the new industrial relations laws will contribute to job insecurity in any significant way. One of the curious things about the modern labour market is that the rise of a large, easily sackable casual workforce has not had the effects on job security that many people suppose.

Indeed, despite casualisation, and despite the impending WorkChoices legislation, when Roy Morgan Research did its survey on job security late last year it found the highest level of perceived job safety since it started asking the question back in 1975 – 83%. Morgan doesn’t disaggregate its data by employment type (its strength is a 30 year time series) but other surveys have, and consistent with Morgan’s aggregate result they find that the difference in job security perceptions between casual and permanent workers is much lower than we might have anticipated.

For example, in the 2005 Australian Survey of Social Attitudes, 46% of casual workers and 49% of permanent workers said that they did not worry at all about losing their job. Taking those who worried ‘a little’ as reasonably secure, overall 73% of casuals and 83% of permanent workers felt secure in their jobs. In the HILDA survey (pdf) respondents were asked to give a percentage chance of losing their jobs in the next 12 months. On average, permanent workers thought they had an 8.5% chance of losing their jobs, and casual workers 13.2%.

It’s not obvious that official work contract status in itself produces even these modest differences in job security perceptions, given that casuals are disproportionately represented in occupations where labour demand fluctuates. That is, they are employed as casuals because they are in jobs that are inherently less viable, rather than casual status itself producing a significant amount of additional insecurity. If your employer is losing money your job is at risk regardless of your permanent status, as the Mitsibushi workers were; if your employer is doing well and you are performing OK you will be reasonably secure, even if you are a casual.

It follows from this that WorkChoices in itself probably won’t add much to job insecurity, which is primarily a product of the laws of supply of demand, and not the laws of the nation.