Australia’s still surprisingly secure workers

The ABS released their labour mobility survey yesterday, and as I predicted two years ago Labor’s legislated job security provisions, which took effect about five months into the survey, did not stop retrenchments going up.

3.7% of workers who were employed in the year to February 2010 were retrenched, compared to 1.8% under WorkChoices in the year to February 2008. Retrenchment levels have more to do with business conditions than legislation.

While the 2010 result confirms that as a general point, the longer term trends on this in the figure below are quite intriguing. As measured by people being retrenched, the common belief that job security is declining over time is not correct. 2010 was the first negative trend in nearly 20 years. Maybe the long boom has saved more employers from the difficult decision to let people go. Or maybe there are other things going on that make dismissal a less common form of labour market adjustment.

5 thoughts on “Australia’s still surprisingly secure workers

  1. Mark Wooden has done quite a bit of work on this. The average length of job tenure has been RISING for 30 years, despite union claims of casualisation of the workforce. But its associated with population aging – fewer young casuals, basically.

    These trends seem to be driven by quite fundamental demographic and economic forces. Things like labour legislation only change them at the margin and in any case are largely a response to, rather than a driver of, these trends.

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  2. Yes, it was Wooden’s work that first put me onto this. Only about 20% of job terminations were due to retrenchment in the latest survey, so as you suggest other factors are bigger in determining job tenure.

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  3. “As measured by people being retrenched, the common belief that job security is declining over time is not correct.”

    To get retrenched, people must first be employed permanently and fulltime. Then we get to the idea of people being underemployed or giving up on seeking work. As this employment status is declining as a proportion of the total workforce, the ideas that fewer people are losing their jobs or that Australian workers are relatively secure are too sweeping for the data here to sustain.

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  4. No, this survey uses the standard ABS definition of employed which includes casual or commission work of 1 hour a week or more. It also includes self-employed (so self-employed people who close their business down or are sent bankrupt are counted as losing their jobs).

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