Unpaid overtime and the future of work

| November 29, 2017

Last week’s ‘Go Home On Time Day‘ was the ninth of its kind, a light-hearted attempt by the Centre for Future Work at the Australia Institute to start conversations in the nation’s workplaces about work/life balance.  The results of a survey organised in conjunction with the event shine a more intense spotlight on the serious incidence of overwork among Australians, including excessive and often unpaid overtime.

The Australia Institute commissions annual opinion polls gathering original data on the incidence of overwork and Australian attitudes toward what it terms ‘time theft’ by companies.  .

This year’s poll of 1421 Australians was conducted by Research Now from September 17th – 26th, with a nationally representative sample of gender, age and state or territory. Of the 1421 respondents, 877 (or 62%t) are currently employed and were asked several questions regarding their hours of work, whether they wanted more work or less, and whether they worked unpaid overtime in their jobs. In addition, the sub-sample was also asked for their thoughts about the prospect of automation in their jobs and the country.

56% of the respondents in the survey were employed in standard full-time jobs, while 44% were employed as part-time, casual or self-employed workers, a breakdown broadly matches the overall labour market.  On average, full-time workers reported performing six hours of unpaid overtime per week – including coming in early, leaving late, working at home or on weekends, and working through regular breaks and lunch hours. Part-time and casual employees work an average of 3.3 hours of unpaid overtime per week, while the self-employed work an average 6.3 hours of unpaid labour each week.

Overall, the respondents said they gave their companies an average of 5.1 hours of unpaid labour per week, up from 4.64 hours last year. The Centre estimates this unpaid labour represents between 14% and 20% of the total time spent working by Australian employees.  They also feared that automation would be used by their employers to cut their workforces without easing the burden on those that remained.

Jim Stanford, director of The Australia Institute, noted the “jarring” disconnect between overwork and underemployment in the economy, and the contradiction between Australians’ optimism regarding the potential benefits of technology and their fears about what will happen in their specific jobs.

Both trends suggest a need for more pro-active labour market strategies to share work across all groups of workers, and to enhance the security and stability of jobs.  He argued that translating the promise of new technology into concrete benefits for workers, in terms of both higher incomes and greater leisure time, will require effective measures to limit overtime, including unpaid overtime.  He also called for steps to enhance the stability of work, especially for workers in the growing number of non-standard jobs, and to give workers more say in how new technology is managed.

The survey suggests that the aggregate value of “time theft” is large and growing larger.  The Australia Institute estimate the total value of unpaid overtime in the national economy to have surpassed $130 billion in 2016-2017, up from $116 billion last year.

The survey also highlights the ongoing polarisation in Australian employment patterns between those with full-time, relatively secure jobs, and a growing portion working part-time, casual, temporary, or insecure positions.  27% of the full-time workers survey said they would prefer to work fewer hours. In contrast, many of those in part-time or casual positions, who work far fewer and more uncertain hours, would prefer to work more.  45% of part-time workers and 60% of casual workers wanted more hours of work.

These problems of underemployment and inadequate incomes experienced by the growing proportion of Australian workers in insecure jobs could be tackled by redistributing work, reducing the incidence of unpaid overtime and improving the stability of hours for part-time and casual jobs.  There would also be significant economic, social, and health benefits from providing workers with stronger protections against unpaid overtime, and finding ways to better share available work.

The Impact of New Technology

There are growing public concerns about the impact of new technologies on the future of jobs in Australia.  These range from the use of computer software, automation and robots to replace workers completely to the new digital platforms which encourage firms to offer casual “gig” work at low rates of pay with no security or benefits to people they do not formally employ.

Australians agree that there are significant potential benefits from new technology, and that those benefits could be experienced by businesses, consumers, and workers alike.  Productivity-enhancing technology could increase workers’ pay while reducing their working hours and respondents to the survey wanted both. 60% wanted to see higher incomes, either on their own, or in conjunction with shorter working hours, while 57% wanted to see shorter working hours either on their own, or in conjunction with higher incomes. Australians clearly want new technology to benefit themselves as well as their employers and favour a balance between a higher material standard of living, and more time off to enjoy that enhanced prosperity.

However, when thinking about their own workplaces, the survey’s respondents feared that employers will actually use new technology to reduce employment levels, rather than increase incomes or reduce average working hours. 57% thought their employer would reduce their workforce, with only 18% expecting shorter working hours and 14% expecting higher incomes as a result of technological change.

This suggests that while Australians see the potential of new technology to improve their lives, they worry that the implementation of new technology may not translate into gains for workers.  This may explain why Prime Minister Turnbull’s calls for a new innovation agenda failed to resonate with the electorate at the last election and consistent attempts by politicians, commentators and entrepreneurs to inspire backing for change fall flat.

If the nation’s workers expect to be impoverished by changes which only enrich a wealthy elite then their hostility to technological progress will only grow, imperilling the much heralded ‘digital transformation’ of the Australian economy.  Politicians and business leaders must show that change will benefit citizens, if the nation as a whole is to embrace change rather than reject it.

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