Future Challenges (2003)

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Future Challenges

Opinion piece by Sex Discrimination Commissioner Pru Goward.
Published in Business Review Weekly, 5 March 2003

I was delighted when BRW invited me to become a regular contributor; the interests of women are increasingly bound up in the world of work so you and I should find common interests, if not common causes. What is more, the times have never suited women better; now is a great opportunity for Australia to embrace meritocracy, diversity and with that the opportunity to be an internationally competitive economy.

So why not start with the challenges ahead.

The fore most challenge for the Australian labour market and for business is its future size. The demographic bulge known as the baby boomers is approaching retirement (many want it early) and the size of the workforce is predicted to decline in real numbers between 2005 and 2007. This has never happened before other than during world wars and plagues. It is for this reason, among others, that the unemployment rate continues to drop despite some economic uncertainty. That presents real pressure for employers. Anyone who thinks skilled immigration can pick up the slack can think again; most of the western world is in the same position and skilled migrants are and will become more valued. Indeed major Australian law firms have already established alumni in London and the US in order to stay in touch with their young ex staff members in the vain hope that should they return to Australia, they will return to them.

The implications of a shortening supply of labour are immediately apparent to business but will also be a problem for governments. Our current dependency ratio is 18 dependents per 100 taxpayers; by 2041 this figure is expected to have reached 41, thanks to the aged.

The cause of the demographic bump is not just the unprecedented fertility of post war Australia, but their children's failure to reproduce themselves from the seventies on. We now have a fertility rate of 1.7 children per woman, well down on the replacement rate of 2.1. This shows no sign of reversing itself; a third of families are now one child families (up from one fifth of families twenty years ago) and about a quarter of young men and women do not expect to have any children at all.

The second change in the labour market that presents a challenge for business is the rising entry age. Today, an unprecedented number of young men and women are still in post secondary training or education well into their twenties; a third of all those aged between 20 and 24. The numbers in education and training in their thirties are also at record highs. Many of them also work; they provide the hospitality and retail industries with many of their casual staff, but it is fair to say skilled employees are now coming into the labour market older than ever before. Understandably most want to earn a return on their investment. This includes women, who are emerging from training colleges and universities hungry for success. When they get out, they have other responsibilities bearing down on them, like family formation and child rearing, and a biological clock that cannot be denied, whatever is claimed by medical science and amazing headlines from some little known part of the world about sixty year olds bearing children.

With this sort of outlook facing young women and their partners, it is no wonder that women (and increasingly men) are demanding family friendly work conditions like part time work at the professional, managerial and skilled ends of the labour market as well as in hospitality and retail. They also want access to child care, paid maternity leave and flexible working conditions. With technology as it is, particularly in the services sector, flexibility is clearly possible. The economics of the labour market will ensure most of the rest gets done. Likewise, the record number of pregnancy discrimination complaints and sexual harassment complaints being received by equal opportunity agencies like my own, suggest young women can no longer afford to accept second rate treatment and feel empowered or impelled to stop it.

So employers will need to be adventurous and inventive in dealing with a very new sort of labour market- highly skilled, mobile and diminishing in size. Unless employers take the initiative in many of these areas, they will find, predictably, that organized labour seeks to impose it upon them. The enterprise bargaining process will ensure it.

And some of these changes might not be so bad. Australia currently has almost half its workforce in non-permanent work. A reversion to the good old days of job certainty could even be good for productivity and loyalty. Australia's long hours culture might also be under threat from employees who can walk away. Again, perhaps not a bad thing. Holland, for example, has 68% of women and 19% of men in part time work and remains the fifth most productive economy in the world- well ahead of those well know long hours cultures of the United States, Australia and the UK. Who knows, we might be a happier people too.

There are many options available for dealing with this; the only option not available is to do nothing.