Making a living? Having a life?
BY JONATHAN SIGNER
Did the living standards and quality of life of workers improve in the 1990s?
The answer is dependent on two questions: what goods and services could they access from their disposable incomes and from the government? And what were their conditions of life in paid employment, unpaid work and leisure time?
A number of studies have highlighted the increased number of "working poor". Working But Poor, by Tony Eardley from the Social Policy Research Centre at the University of New South Wales, revealed 460,000 (7.4%) of all adult employees lived in families whose total incomes fell below the Henderson poverty line in 1995-96, more than double the 3% in 1981.
But the other 1990s trend is a relative decline in the incomes of both middle- and lower-income workers. Their disposable incomes are homogenising, while those of the best-paid workers are going further ahead.
Disposable incomes
Individual disposable incomes tended to follow movements in pay rates and earnings in the 1980s and 1990s, since income taxes were largely unchanged. The best-paid workers did less badly than others in the 1980s and did best in the 1990s.
In the latter half of the 1980s, the disposable incomes of the worst-paid workers kept pace with middle-income workers, because their income tax rates fell.
In the 1990s, though, income taxes on workers increased across the board and those on lower earnings fell further behind in disposable income. Those on the 10th (bottom) percentile of earnings had increases of just 6.8% in disposable income between 1991 and 1998, while those on median earnings gained 12.8% and those on the 90th (top) percentile, 14.4%.
The Hawke and Keating Labor governments claimed the introduction of additional family payments from late 1985 had counteracted growing inequality in earnings and disposable income.
While these payments did nothing for low-paid workers without children, family payments did mean disposable incomes for poorer working households with children increased more quickly than those of other working households. Between 1985 and 1998, for example, the disposable income for a low-paid sole parent with a 6-year-old child, in the 10th percentile, increased by 21.3%; those earning the median gained 4.3%, and those in the 90th percentile, 11.5%. The comparable figures for a single-income couple with children aged 6 and 14 were 25.9%, 7.6% and 9.8%.
Additional family payments changed little in the 1990s, except for an extra payment for sole parents in 1993, and tax reductions were offered to all families with children by the federal Coalition government. Thus, between 1991 and 1998, in the above examples, for the sole parent the respective changes for the 10th, median and 90th percentiles of earnings were 14.7%, 13.2% and 16.2%, and for the couple 11.5%, 13.9% and 16.7%.
The disposable incomes of households, as well as of individuals, may be important for workers' living standards, though: many households have two or more income earners helping to cover its expenses.
A study by the National Centre for Social and Economic Modelling, reported in the June 19 Australian, shows the poorest 10% enjoyed the highest rate of increase in disposable incomes among households between 1982 and 1996-97, an increase of more than 30%. The second lowest 10% gained an average of 15%, the third lowest less than 10% and the rest, up to 90%, about 5%. The incomes of the top 10% of households grew by more than 10%.
For the top 10%, however, this represented an average increase of more than $190. For the lowest 10% the average was just $55. The remainder gained about the same or less than the lowest income households. Thus, for 80-90% of households, disposable incomes were less differentiated by the middle of 1997 than they had been 15 years before.
Kept out of work
The working class' disposable incomes are also reduced over time if an increasing amount of that time is spent out of work and, therefore, on a lower (or no) income.
In the 1990s unemployment and underemployment kept more workers out of paid employment than at any time since the Great Depression of the 1930s. The official unemployment peaked at over 11% in 1992-93 and fell below 7% only at the end of 1999.
Between 1989 and 1999 part-time employment rose from 21% to 26% of the whole work force, with nearly one-quarter of part-time workers continually stating in Australian Bureau of Statistics surveys that they would like longer normal working hours. These workers constituted a lower-paid section among workers.
Younger people, in particular, tended to be out of the work force, or at least full-time work, more while studying in the 1990s. A 1998 study by the Australian National University's Bob Gregory estimated males up to 24-years-old were earning 30-50% less than they had 20 years before.
Older people also increasingly experienced earlier "retirement". According to the recently published Australian Social Trends 2000, in 1997 1.3 million men aged 45-64 "had retired from full-time work, nearly all of whom had left the labour force entirely ... Retrenchment rates were highest for persons aged 55-64."
The overall increase in workers' disposable incomes also had to compensate for government cutbacks that continued from the 1980s into the 1990s.
Much of the impact of these cuts is difficult to quantify. Where funding from general revenue was replaced by special levies, however, such as occurred with Medicare and the Higher Education Contribution Scheme (HECS), this reduced disposable income without changing the service provided.
HECS, introduced by Labor in 1989, was a charge imposed for tertiary studies and collected as a levy on taxable income once it reached certain levels, originally starting at average weekly earnings. During the 1990s the charge increased by two- to three-fold, the levy rate increased substantially (from 1-3% to 3-6%) and the income thresholds on which it was paid dropped to a point where the lowest barely exceeded the minimum wage.
This sped up the payment of HECS — by the end of the 1990s a graduate, if able to work in his or her profession, might typically pay off their debt in 5-8 years. But by the end of the 1990s, HECS had reduced the disposable incomes of persons repaying the debt by up to 10% when compared with what these would otherwise have been.
Former students on below-average earnings had less spending capacity in 1998 than they had had in 1985 and even those on the 90th percentile of earnings for non-managerial workers had gained only 1-2% in that period. Thus, many graduates were part of the growing homogenisation of most workers' disposable incomes in the 1990s.
Speed-up
Changes in working life — work intensification and the extension of the working day — also increased the demands placed on disposable incomes, while reducing the amount of, and perhaps even the benefit of, leisure time.
What's Happening at Work, a study by academics Michael O'Donnell, David Peetz and Cameron Allan of a 1994 federal industrial relations department survey, showed more than 50% of workers had experienced complex or radical change at work in the previous year.
Generally this involved increased work intensity (imposed through increased workloads and failure to replace staff), usually combined with broadened responsibilities or, less often, with increasing job insecurity. More than half of the remaining workers had experienced at least one of these types of changes.
While the figures show no change in average hours worked overall, that's because different sections were going in different directions — full-time workers' hours were increased while an increasing proportion of workers could only work part-time.
The immediate results of more intense work and more working hours was growing work-related stress and reduced leisure time for workers. According to O'Donnell, Peetz and Allan, a majority of employees reported increased stress over the previous year: more than 70% reported this among those who had faced complex change and 88% among the 15% suffering radical change, which must have impacted on their enjoyment of leisure.
The federal industrial relations minister, Peter Reith, defended longer hours in October. There were workers, he said, "who rely on that paid overtime" to maintain living standards. He cited results of a 1995 federal government survey that 80% of full-time employees did not want shorter working hours, including 62% of those who worked more than 49 hours a week.
Unpublished figures supplied to Green Left Weekly from a 1999 ABS survey, however, show that of those who had worked 49 hours or more in the survey week, 57.6% expressed a preference for working fewer hours.
Among all who had worked more than 40 hours only 53.7% were happy working the same or longer hours. 75% of those who had worked 35-40 hours preferred those hours. Among those who had worked less than 35 hours, 37.5% wanted more hours, including more than 45% of those who had worked 14 hour or less. Most workers want to work the standard, 35-40 hour week.
Despite such preferences, workers were working longer hours, increasingly unpaid, in the 1990s.
Wages, earnings and disposable incomes for most workers were at similar levels in 1995 to what they had been a decade before. If workers were now willing to work longer hours to maintain living standards, this can only be because their expectations for these living standards had meanwhile grown, as had workers' productivity and production.
Increased working hours and increased work force participation (and, therefore, increased unemployment) are partly a result of the suppression of earnings and income below expectations in the 1980s and 1990s — workers ran faster in an attempt to at least stay in the same spot, if not get ahead.
The Coalition and business are now bending their efforts to lowering workers' expectations, by calling for reduced wages, especially for the worst-paid, as a "solution" to unemployment. They hope to thus cement the shift in wealth to business that employers, backed by Labor and Coalition governments in the 1980s and 1990s, have carried out.