There was a time in Australia when the employed would labour for twelve hours a day, six days a week, with little to no workplace regulations. The early 1800s were tough for labourers all throughout Australia, however these conditions could not last. Cultivating in Melbourne on the 21st of April, 1856, the Australian Labour Movement began when stonemasons and builders marched from the University of Melbourne to Parliament House in protest. An agreement for a 40-hour work week was reached, and the victory march was held on May 12th in the same year. Over the next few years, each state of Australia slowly began to recognise the new regulations, concluding with Tasmania in 1874. The movement is celebrated nationally, though on different days and under different names, notably as May Day on May 1st in Queensland.
At the time this was a drastic movement, however in 2017 not only does a twelve-hour day sound inhumane, it has also become uneconomical. In June 2015, the Committee for Economic Development of Australia (CEDA) released a report called ‘Australia’s Future Workforce’ which found that around 40% of the Australian workforce (or approximately five million jobs) “face the high probability of being replaced by computers in the next 10 to 15 years”.
The issue of automation is far from exclusive to Australia. Companies globally have been investing in technological innovations to produce cheaper goods and services in order to remain competitive in the marketplace. Eventually, these technologies become so cheap and efficient that they can replace people, leading to greater unemployment. Consequently, Australia and nations around the world have been brainstorming means of addressing the issue over the last few years, and thus far two primary solutions have been proposed: a further reduction in hours of the work week, as well as a guaranteed basic income system.
In the year 2000, French Prime Minister Lionel Jospin, leader of a left-wing coalition of five French parties called the ‘Plural left’, established the 35-hour working week in France. From 1999 through 2001, unemployment in France fell from 10.3% to 7.8%. However, every aspect of the regulation has since been debated and questioned, ranging from whether the unemployment drop was due to the new laws or from strong economic growth at the time, to whether or not its effects lasted through the economic decline experienced during the GFC. Additionally, the 35-hour working week has not been as universally admired and accepted as the 40-hour working week was many years ago, making France currently the only prime point of reference when assessing the legislation. Therefore, it is difficult to predict what kind of an effect this legislation would have upon Australia, if any.
The guaranteed basic income system, however, has attracted much more experimentation and interest from countries around the world, and has already been tested on small scales as a means of combating unemployment, with accounts of similar law implementations dating as far back as the 1960s. A guaranteed basic income system provides a liveable income to individuals as long as they meet certain requirements of the nation, and a universal basic income system (UBI) exists when the only requirement is for an individual to be a citizen of the state. The system is essentially an evolved version of the welfare systems present in most countries today, though rather than only providing fiscal relief to those in certain categories, it would provide an income for any number of citizens within the state.
On January 1, 2017, Finland became the first country in Europe to introduce a pilot scheme where 2000 unemployed individuals will receive €560 (approximately $770 AUD) a month. In this trial, the basic income replaces all previously existing social benefits, however there are no deductions should the participants find work. This means the individuals will always have a financial foundation to fall back on no matter the consistency of their employment. Marjukka Turunen, head of a Finnish legal affairs unit, claims “there are no repercussions if (participants) work a few days or a couple weeks… Working and self-employment are worthwhile no matter what”. Should this system succeed, the Finnish government expects a reduction in poverty and a boost in employment. Additionally, the province of Ontario in Canada will be implementing a pilot program of the same ilk this Winter, and other countries including the Netherlands, Scotland, and Italy are considering similar steps.
There has been very little discussion over basic income strategies in Australian politics, though the issue has slid its way into public debate ever since Finland announced its new legislation. It goes without saying that the biggest issue with a UBI comes from the fiscal side, however Mikayla Novak, a research fellow at the Institute of Public Affairs, noted that a system similar to Finland’s “may have applications in Australia”. She went on to say that were the Australian government’s 2013-2014 expenditure on social security and welfare redistributed, every adult in Australia could have received $714 per month for the year. However, to produce an effective UBI from tax income, welfare expenditure would need to at least double. Should a government choose not to reach into tax dollars and simply allocate credit to citizens, heavy inflation could entail. Further, progressive tax systems and reform built to address the problem quickly become over-complicated.
However, despite these monetary hurdles, the most important thing Australians need to understand at this point in time is that a UBI or reduction in weekly work hours is not a question of progressive or conservative political ideologies. Progressives want to live in a state which can provide greater equality to its citizens, and conservatives welcome small government, both of which can occur under both a shorter working week or an efficient, cost-effective application of a UBI. So rather than making this a political debate, Australians should collaborate in finding solutions to the impending wave of mass-technological unemployment.
Written by Publications Officer, Tim O’Brien