As the scale of the COVID-19 pandemic revealed itself in the early months of 2020, many Australians retreated quickly, at the urging of our public health officials and political leaders, behind closed doors. Shops were shut, offices emptied of white-collar workers, restaurants and bars turned out the lights, and children were sent home from school to anxious parents. Panicked and scared, we hunkered down, ensconced among absurd amounts of toilet paper and bags of flour and rice, waiting for the allclear to return to normal life.
That so many of us were able to isolate ourselves at home is a privilege we must not take for granted. We could do so because our work is done on computers, connected through optical fibres, wires and electrical currents that enable us to Zoom into one another’s lounge rooms and send the products of our labour across the country and around the globe as digital files of words and information.
And we could do so because many other Australians left their houses each day, braving the risk of infection that sent the rest of us scurrying indoors, to deliver the essential goods and services that kept us alive. The disability and healthcare workers, truck drivers and posties, early childhood educators and aged care attendants, supermarket staff and delivery drivers, agricultural workers and meat packers, warehouse staff and cleaners: all toiled tirelessly, in masks and gloves, to provide us with food and care—the essential sustenance that kept us comfortable and cocooned in our homes.
In the United Kingdom, people gathered on their doorsteps on Thursday evenings to applaud the staff of the National Health Service, while in Australia our politicians and talking heads spoke earnestly about the sacrifices made by our ‘essential workers’. There was, it seems, a light-bulb moment in which we all realised that the truly invaluable work in our economy is done not by the captains of industry who, we have been told, create our jobs and drive our precious economic growth. Apparently, it was a revelation to many of us that the people who keep society ticking over are those we take for granted every day: those who care for our kids and our elderly, who pick our vegetables and stock our supermarket shelves, who nurse us when we are sick and clean up after us as we go about our lives. ‘Aren’t they wonderful?’ we gushed. ‘What would we do without them, these dedicated, uncomplaining people who do such things? We must thank them!’
How about we pay them instead? Because, for all their uncomplaining dedication, these essential workers are among the lowest paid in our economy. The work they do, so obviously vital now that the busyness of the knowledge economy is stilled, is always indispensable, but it is greatly undervalued by an economic system that privileges innovation and wealth creation over the mundane work that sustains human life.
Many of these workers are women. There are men among their ranks, often first-generation immigrants and people of colour, or those from generations of lower-income manual labourers, but the work they are engaged in—even in the warehouses or the transport and logistics services needed to deliver goods to market—has its roots in domestic life. This work—the provision of care, food and human services—was once the domain of the home. It was, essentially, women’s work.
In our capitalist market economy, such work is largely dismissed as unskilled, uninspiring and unworthy of investment. Instead, economic orthodoxy dictates that investment should be targeted to innovation, to adding monetary value to raw materials and to building wealth through the creation of new products and services that we didn’t know we needed. To men’s work.
Feminist economists have characterised the way capitalist economies value work as the ‘sexual division of labour’: that is, men’s work is seen as productive, while women’s work is reproductive.1 Much reproductive work remains unpaid and still occurs in the home, but as women have entered the paid labour force in greater numbers over the last half-century, an increasing amount of previously unpaid domestic work has been outsourced to the paid labour force.
And so it is in these basic care and services jobs that an increasing majority of Australians of all genders are employed, and it is the work they do that brings meaning and security to our lives. It is quite literally the foundation of our way of life: it is the work of the foundational economy.2
Most work in the foundational economy involves a complex mix of physical and psychological abilities but, due to its roots in the home, is too often dismissed as ‘unskilled labour’ and accordingly is underpaid. Over recent years, the wages and conditions for many of these jobs have been further eroded by their excision from the standard labour market into the so-called gig economy.
Other chapters in this book grapple with the important challenges of restoring Australia’s economy through conventional government stimulus investment in such things as transport infrastructure, construction and manufacturing. They contain big-picture thinking about harnessing technology and mission-based industry policy to drive innovation, and make the case for investing in education, research and development to diversify our industrial base and build resilience and sustainable growth in our economy. These are critical arguments if Australia is to tackle climate change and inequality, and create good, secure jobs that will underpin new primary industries in a post-carbon world.
But I want to challenge us to think smaller. It is right that public policy is concerned with expanding the cutting edge of our economy, but it is not enough. For too long, we have neglected the foundations upon which that economy is built; and they have become plagued by exploitation, eroded by misplaced parsimony, and destabilised by the extraction of resources. There is a strong case to be made for investing in the female-dominated foundational economy as we have done in more high-profile, male-dominated sectors in the past.
Before the onset of COVID-19, roughly 40 per cent of the Australian workforce was employed in jobs that can be considered as part of the foundational economy. A precise figure is not available based on current data from the Australian Bureau of Statistics, because industry sectors as currently measured can include both foundational and specialist jobs. However, if we consider the overall numbers of workers in those sectors dominated by foundational jobs, it is clear that at least one in three Australians was, in 2019, working in a relatively low-paid job in the provision of health and social care, social services, retail, hospitality, transport or the production and provision of food.3
While many of these workers—those in health care and social assistance, community services, food production and transport—have remained employed throughout the pandemic, many in retail, hospitality, accommodation and food services have found themselves without work, forced to rely on the JobKeeper program at best, or pushed into unemployment on the lower JobSeeker payment.
Tellingly, one of the criticisms of the initial design of the JobKeeper package was that it was providing to some low-income and part-time workers a higher rate of pay than they had received while employed. Many part-time female workers in the early childhood education and aged care sectors in particular saw their incomes increase when they were put on the payment, which was one of the spurious reasons offered by the government when they removed the early childhood sector from the payment months before any other industry.
As the government began to turn its attention away from immediate spending support for the economy during the economic shutdown and towards long-term recovery, it came under pressure to keep the $550-per-fortnight subsidy to the JobSeeker unemployment benefit. Long before the pandemic, a growing chorus of voices was calling for an urgent increase to the criminally low rate of unemployment benefit, which was known as Newstart before the onset of COVID-19.
Australia has a high rate of part-time and casual work by international standards, especially in foundational economy jobs: in 2019, almost half of all women in the workforce worked part time, and over 40 per cent of those aged under thirty-four were on part-time, casual or fixed-term contracts.4 One of the difficulties encountered by government when faced with calls to keep the new rate of the unemployment benefit introduced during the pandemic is that, at just over 60 per cent of the full-time minimum wage, many people previously employed in foundational economy jobs were receiving more money from JobSeeker than they had earned while working up to three days per week in their old jobs.
Leaving debates about the design flaws in the government’s economic support package aside, the real issue here is that there are far too many jobs in our foundational economy that pay so poorly, and offer such insecure and insufficient hours of work, that those working in them are living barely above the poverty line. At the temporarily increased rate of JobSeeker, many of them were literally better off on the dole.
Lifting wages and conditions for these workers would not only improve their individual and family circumstances and make jobs in the foundational economy more attractive to men as well as women, it would boost economic growth, as every additional dollar earned by someone living just above the poverty line is spent back into the economy, lifting aggregate demand for goods and services.
More fundamentally, though, investing in the foundational economy reaps benefits across society in more than monetary terms. Improving the quality of our essential services increases social and mental wellbeing, reduces ill-health and social exclusion, and strengthens community and social cohesion.
Surveys show that Australians value high-quality public services,5 and demand the highest level of care when we entrust our children or elderly loved ones to the custody of others. Yet we have allowed ourselves to sleepwalk into a society in which profit and productivity are considered more important values than the quality of care we provide to one another.
The Royal Commission into Aged Care Quality and Safety established in 2018 has revealed incidences of neglect and abuse in residential aged care facilities across the nation that have shocked Australians. Yet the fact that the quality of services is compromised by cost-cutting in the pursuit of profit should not be a surprise. The need to ensure high-quality care is fundamentally at odds with the imperative to make a profit from a privatised system of care for vulnerable people.
Similarly, the for-profit model of early childhood education and care has proved to be unstable and inefficient: child care was the first sector to find itself on the brink of collapse during the pandemic, despite being deemed an essential service and required to keep operating. The government’s short-term intervention kept the centres open at the height of the economic shutdown, but it was aimed at propping up a business model that has been teetering for years and serves no one well save the owners of large-scale, for-profit providers. Parents struggle to keep up with ever-rising fees, while workers scrape by on the minimum wage, with little job security.
Despite widespread dissatisfaction with the current system, when the Australian Labor Party took policies to the 2019 election that would have made child care free for the majority of working families and at the same time provided direct-to-worker, government-funded subsidies to increase the wages of childcare workers, they were excoriated by mainstream economists, who decried the wages policy as an unwarranted intervention in the market.
The policy was certainly highly interventionist, but it was an entirely justified response to a clear case of market failure. When markets fail, as they have so obviously done, to adequately value the reproductive work that makes up the foundational economy, government intervention is warranted.
This is the fundamental case for reconsidering how we value and reward the jobs done by the essential workers in our society. The market has failed—in fact, refused—to value them properly, so we must collectively and consciously undertake an explicit revaluation of their worth. How can this be done in the face of an unyielding orthodoxy that insists that productivity is the only measure of merit in our economy?
The first step, surely, is to make the argument that there are more important values than productivity, and to frame our measures of success as a society around the concepts of care, sustainability and wellbeing, rather than profit, growth and material wealth. If we proceed from that assumption, then we must accept that government intervention in the market, where it is aimed at improving the care that we show for one another and the planet and increasing wellbeing within our communities, is an unequivocally good thing. With that acceptance can come a range of measures to make change.
Labor’s childcare wages policy was effectively a massive supply-side investment in human capital. This is the only obvious way to quickly and meaningfully address the intractable refusal of our economy to properly value the work done by those in the foundational economy.
In the immediate term, investment by government to directly lift wages in some chronically underpaid jobs in essential services will be necessary, while tax concessions, such as a US-style earned income tax credit, may also be useful interim measures. In other sectors, productivity investments in service delivery, or in skills training and accreditation, may assist.
Shifting business models for the provision of essential services and care away from large, for-profit multinational firms and towards local, community non-profit or cooperative models would remove the imperative to maximise profits at the expense of quality and restore trust between the users and providers of essential services.
As outlined later in this book by Osmond Chiu, a reinvestment in the capacity of our public sector is another essential requirement if we are to build a more caring, sustainable economy on the other side of COVID-19. Longer term, though, we must rebalance the division of labour across society, including by more equally sharing the load of unpaid domestic work between men and women. The single best way to achieve this is to gradually reduce the standard full-time working week from five days to four, or from forty hours to thirty-two. Critically, this must be done without a reduction in wages, in recognition that too few of the benefits of increased productivity over recent decades have been awarded to labour.
There is strong evidence to show that workers are just as productive across a four-day week as they are over five.6 That this concept is regarded as radical by mainstream economists, and even by the contemporary labour movement, shows how deeply ingrained the productivity mantra that demands more and more work for less reward has become in our collective psyche. After all, the eight-hour day was considered radical once. So was the weekend.
If we are to reconstruct Australia in a way that provides opportunity for all people to build the best possible life, and to share equally in our common wealth, then we cannot continue to treat the foundational economy, and the essential workers within it, with wilful neglect.
As we emerge from the COVID-19 pandemic, we are presented with an opportunity to redesign our economy and create a new society. We must do so by drawing on the deep-rooted, radical kindness that underpins human relationships, and demand better of one another, of our leaders, and of ourselves. It is how we care for one another, and for the planet on which we live, that must define our values for the next era of human civilisation.