The Australian labour market in 2018

Abstract

In 2018, the Australian labour market continued to see only very moderate wages growth despite strong employment growth and low unemployment. This remains an international phenomenon with underlying economic and legal structural causes. Employment growth was concentrated in part-time jobs for both males and females, and in both manufacturing and white-collar industries. The Fair Work Commission increased the National Minimum Wage by 3.5%, a higher percentage increase than previous years but one that reflected higher growth in average earnings and inflation. The climate surrounding agreement making was less febrile than in recent years, with fewer high-profile attempts to terminate existing enterprise agreements. However, collective bargaining coverage in the private sector continues to decline to historic lows. Changes to skilled migration were the most significant shift in labour market policy in 2018, with a significant reduction in the number of permanent skilled migrants and a new temporary skilled migrant visa category with much stricter eligibility requirements. If sustained, this reduction may contribute to increasing pressure on wages in the years to come.

Keywords

Economics hours of work labour market sector minimum wage pay underemployment unemployment wage bargaining

Introduction

This article reviews the state of the Australian labour market in 2018. The article begins with an overview of economic conditions, which featured strong economic growth overall and on a per capita basis. Positive economic conditions were also reflected in the labour market. Unemployment and underemployment decreased overall, but part-time work as a share of total employment rose for both males and females. The next section reviews the data on wages growth and agreement making. In the final section, we take an extended look at the potential significance of a substantial reduction in skilled migration, which may have an impact on the labour market in the coming years.

Macroeconomic conditions

The Australian economy grew by 3.4% in the year to June 2018, a strong result driven by growth in exports, non-mining business investment and government expenditures (Table 1). There was commensurate growth in gross domestic product (GDP) per capita, while GDP per hour worked also improved from 2017.

Table 1.

Selected macroeconomic indicators, 2016–2018.

Annual percentage change	2016	2017	2018
GDP	3.2	1.9	3.4
GDP per capita	1.7	0.3	1.8
GDP per hour worked	2.4	−0.7	1.0
Real unit non-farm labour costs	0.2	−4.0	−1.3
Consumer Price Index	1.0	1.9	2.1
Retail sales	2.9	3.7	2.8
Business investment	−16.2	−2.2	2.7

Sources: (1) Australian Bureau of Statistics (ABS), 2018a, June 2018 (Table 1, seasonally adjusted data); (2) ABS, 2018b, June 2018 (Tables 1 and 2, Original data); (3) ABS, 2018c, June 2018 (Table 1, Seasonally adjusted data); (4) ABS, 2018d, June 2018 (Table 1, Original data). GDP: gross domestic product.

Growth in retail sales pointed to continuing strong private demand conditions, which buoyed business investment in 2018 following weaker business confidence in 2016 to 2017.

Despite the stronger economic conditions, declines in non-farm labour costs were illustrative of continued weakness in wages growth. The weak wages growth continues to contribute to low rates of inflation in Australia, with the Consumer Price Index climbing slightly to 2.1% in 2018.

Labour market overview

The Australian labour market showed strong employment growth in the year to June 2018, with the ratio of employment to population increasing to 67.1% for males and to 57.5% for females (Table 2). The strong conditions led to historically high rates of labour force participation, driven by the participation of younger females and older males, as well as low rates of unemployment. As at June 2018, the overall unemployment rate had fallen to 5.2%, approaching the level conventionally accepted as full employment.

Table 2.

Key labour market indicators, 2016–2018.

	2016		2017		2018
	Males	Females	Males	Females	Males	Females
Participation rate	70.4	59.6	70.6	59.9	71.0	60.6
Employment to population ratio	66.6	56.0	66.7	56.4	67.1	57.5
Part-Time share of employment	18.3	46.4	17.8	46.6	18.5	47.0
Underemployment rate	7.1	10.5	6.8	10.5	6.1	10.5
Unemployment rate	5.4	6.0	5.6	5.7	5.5	5.2

Source: Australian Bureau of Statistics, 2018e, August 2018 (Table 1, Original data).

In addition, the part-time share of employment increased to 18.5% of males and 47% of females. The underemployment rate remained stable amongst females and fell amongst males, suggesting that the increased part-time employment aligned with employee preferences.

Industry conditions

In the year to June 2018, over 300,000 jobs were added to the Australian economy. This employment growth was fairly broad-based across industries, with strong gains in manufacturing and public administration/safety (Table 3). There were collectively strong gains in white-collar service industries, including professional services, financial services and rental/hiring services. There were declines, however, in low-paid industries, including retail, accommodation/food services and administrative services.

Table 3.

Select industry performance indicators, 2018.

ANZSIC industry	Contribution to total growth (% points)	Employment growth (000s)
Agriculture, forestry and fishing	−0.2	−8.2
Mining	0.3	32.9
Manufacturing	0.1	86.4
Electricity, gas, water and waste services	0.1	6.1
Construction	0.4	30.0
Wholesale trade	0.0	−9.5
Retail trade	0.1	−9.6
Accommodation and food services	0.1	−12.9
Transport, postal and warehousing	0.1	2.4
Information media and telecommunications	0.1	1.9
Financial and insurance services	0.2	35.9
Rental, hiring and real estate services	0.0	16.8
Professional, technical and scientific services	0.3	65.4
Administrative and support services	0.1	−3.4
Public administration and safety	0.2	86.1
Education and training	0.1	−7.5
Healthcare and social assistance	0.5	5.6
Arts and recreation services	0.0	7.6
Other services	0.1	−19.6
All industries	3.4	301.2

Sources: (1) Australian Bureau of Statistics (ABS), 2018a, June 2018 (Table 6, Seasonally adjusted data). Figures do not sum to total for all industries because of statistical discrepancy and other small contributions to gross domestic product; (2) ABS, 2018g, August 2018 (Table 4, Seasonally adjusted data). Figures do not sum to total because of rounding and seasonal adjustment. ANZSIC: Australian and New Zealand Standard Industrial Classification.

These changes in employment did not closely mimic the industries that contributed most strongly to GDP, reflecting the relative differences in their use of labour and capital, and the industry-specific demand conditions. The industries that contributed most strongly to GDP in 2018 included construction and healthcare/social assistance.

Employment by state and capital cities

As we discuss later on, there has been pressure to tighten eligibility criteria for both skilled and overall immigration, with an emphasis on alleviating pressure on New South Wales and Victoria in particular (especially in Sydney and Melbourne). The data in Table 4 indicate that the employment conditions in Greater Sydney and Melbourne are indeed more robust than both their respective states and other state capital cities. This is evidenced by either higher employment to population ratios, and/or lower unemployment rates, the latter which indicate low levels of labour underutilisation. Overall, the metropolitan areas also experience stronger labour market conditions than their regional counterparts.

Table 4.

Percentage changes in number of employees working part time, full time and extended hours.

	Males			Females
	2016	2017	2018	2016	2017	2018
1–19 hours	6.2	−0.6	0.7	4.3	−3.5	5.5
20–34 hours	4.6	0.4	7.1	2.4	8.5	2.3
35–49 hours	3.7	2.2	2.3	2.4	1.5	4.3
50 or more hours	−7.9	2.7	−0.4	−0.9	6.3	−4.3

Source: Australian Bureau of Statistics, 2018g, June 2018 (Table 10, Original data).

Hours

The data in Table 5 provide more detail on areas of employment growth. It shows that the strength has been concentrated amongst those working part time, particularly for females working between 1 and 19 hours weekly (rising 5.5%) and for males working 20 to 34 hours weekly (rising 7.1%). There were also more modest gains in full-time employment (weekly working hours > 34), with the number of females and males working full-time rising by 4.3% and 2.3%, respectively.

Table 5.

Change in minimum and average wages, 2014–2018.

	2014	2015	2016	2017	2018
NMW ($ per week)	640.90	656.90	672.70	694.90	719.20
NMW change on previous year (%)	3.0	2.5	2.4	3.3	3.5
CPI change on previous year (%)	3.0	1.5	1.0	1.0	2.1
AWOTE change on previous year (%)	2.4	2.0	2.1	1.8	2.6
WPI change on previous year (%)	2.6	2.3	2.1	1.9	2.1
AAWI for agreements approved (%)	3.4	3.2	3.0	2.6	2.8
NMW as % of AWOTE	44.0	44.2	44.4	45.0	45.3

Sources: Australian Bureau of Statistics (2018b, 2018h, 2018i), Fair Work Commission (2014, 2015, 2016, 2017, 2018) and Department of Jobs and Small Business (2018).

Note: AAWI refers to the Average Annual Wage Increase for all wage agreements lodged in that quarter (where an AAWI can be calculated). The reference periods are as follows: CPI: June quarter; WPI: June quarter; AWOTE: May; AAWI: March quarter. AWOTE figures refer to trend data for all full-time adults. NMW rates take effect on 1 July each year. NMW: National Minimum Wage; CPI: Consumer Price Index; AWOTE: average weekly ordinary-time earnings; WPI: Wage Price Index.

In 2018, there were modest declines in the number of employees working extended weekly hours (over 50), compared to growth in this area in 2017.

Wages and wage setting

In the past, annual wages growth of between 3% and 4% was the norm, yet in recent years, wages growth has stabilised at around 2%. This is shown in Figure 1. Commentary from the Reserve Bank of Australia (RBA) attributes the shift to both cyclical components – such as underutilisation of the labour force – as well as structural components – including the reduced bargaining power of workers, and the strong cost-control focus of those firms unable to take advantage of new technologies (Lowe, 2018).

In 2018, there was evidence of stronger wage growth in both measures of wages growth considered here: Average Weekly Earnings (AWE), which compares the average wages of the workforce as currently composed; and the Wage Price Index, which focuses on the price of labour by attempting to control for variation in the quantity and quality of labour over time. Though acknowledging that the AWE series is generally more volatile, its stronger performance than the other two indices may support the RBA's position that wage growth is occurring through reducing underutilisation, rather than any increase in the price of labour (particularly relative to technology) or increase in the bargaining power of workers.

If we look internationally, evidence points to continued subdued wage growth despite strong employment growth in the United States, the United Kingdom and other countries. The Chief Economist to the Bank of England (Haldane, 2018) attributes the low wage growth to a combination of structural factors: declining rates of union membership and collective bargaining coverage in the private sector, low productivity growth and automation.

One shift from previous periods of economic recovery is that, because workers' pay power has eroded, firms can deploy greater differentiation in pay rates, giving pay increases to retain favoured workers and attract new workers without having to increase overall going rates (Haldane, 2018: 10). Certainly this would be the case in the Australian context, where the decline in collective bargaining coverage facilitates greater discretion in pay setting by management (Oliver and Walpole, 2018). Haldane also credits automation and monopolistic competition as two accelerating trends suppressing wage growth. Acemoglu and Restrepo (2017) have estimated that one extra robot per thousand workers lowers wages by 0.25%–0.5%. The (re-)emergence of globally dominant firms that dominate the production of a particular good or service (and therefore employ all or most of the labour required) is also reducing workers' pay power, especially where collective bargaining is low.

National Minimum Wage Decision 2018

On 1 June 2018, the Fair Work Commission determined to increase the National Minimum Wage (NMW) by $24.30 per week, to $719.20 per week (Fair Work Commission, 2018). This represents a 3.5% increase on the 2017 level, a higher percentage increase than recent years. However, the 2018 determination was also made in a context of higher inflation and higher growth in average weekly ordinary time earnings (AWOTE) than in 2016 or 2017 and was met with general acceptance from the Commonwealth Government and employers. The NMW as a proportion of AWOTE increased only slightly to 45.3% (see Table 6). The Australian Council of Trade Unions (ACTU) continued to claim that the NMW should be benchmarked to 60% of AWOTE.

Table 6.

Change in temporary skilled migration by industry, 2013–2018.

	30 June 2013	30 June 2014	30 June 2015	30 June 2016	30 June 2017	30 June 2018	% change 2017–2018	% change 2013–2018 (est.)
Accommodation and food services	6790	6270	6050	5510	5130	3700	−27.8	−45.5
Administrative and support services	290	320	380	340	330	240	−26.7	−17.2
Agriculture, forestry and fishing	1390	880	860	720	950	910	−3.8	−34.5
Arts and recreation services	820	590	540	560	620	390	−37.1	−52.4
Construction	7870	4740	3970	3000	3400	2130	−37.3	−72.9
Education and training	3460	2860	2810	2330	2500	1940	−22.4	−43.9
Electricity, gas, water and waste services	1200	840	570	370	450	490	9.1	−59.2
Financial and insurance services	2360	1750	1710	1690	1740	1100	−36.9	−53.4
Health care and social assistance	7430	5150	4630	4810	4920	4570	−7.1	−38.5
Information media and telecommunications	6700	5820	6990	6880	6000	4060	−32.3	−39.4
Manufacturing	3800	2350	2410	2070	2010	1440	−28.3	−62.1
Mining	4630	2670	1850	1090	1030	400	−61.3	−91.4
Other services	8440	7210	8289	6240	8050	5940	−26.3	−29.6
Professional, scientific and technical services	5580	5070	5820	6490	6150	5030	−18.1	−9.9
Public administration and safety	560	380	220	160	170	70	−56.3	−87.5
Rental, hiring and real estate services	440	300	340	230	230	80	−65	−81.8
Retail trade	3070	2440	1880	1650	1640	1110	−32.2	−63.8
Transport, postal and warehousing	1000	860	790	540	570	390	−31.9	−61.0
Wholesale trade	1610	1120	920	700	630	450	−27.9	−72.0
Not specified	1070	330	130	20	10	10	80.0	−99.1
Total	68,480	51,940	51,130	45,400	46,480	34,450	−25.9	−49.7

Sources: Department of Home affairs (2018b); Department of Immigration and Border Protection (2014, 2015, 2016, 2017).

Note: Figures have been rounded by the Department of Immigration and Border Protection/Department of Home Affairs. Consequently, totals and percentage calculations may not match.

The Commission cited the risk of reducing employment opportunities for low-skilled workers and young people as the reason it did not support a higher increase, such as the increase of $50 a week sought by the ACTU (Fair Work Commission, 2018: 104). The Australian government had not specified a desired increase in its submission, and then Workplace Relations Minister Craig Laundy responded to the decision as delivering a ‘carefully considered and balanced outcome’ (Australian Broadcasting Commission, 2018).

The Commission made particular mention of income inequality and poverty levels in its 2018 decision. It noted that while evidence suggests that income inequality has been fairly stable in Australia in recent years, it remains higher than many other comparable countries, including Canada, the Netherlands, France and Germany (Fair Work Commission, 2018: 323). The Commission emphasised the weight it accords setting the NWM at a level ‘to provide an adequate standard of living to a single adult’, and acknowledged that it was constrained in its ability to take into account the standard of living of single-income families dependent of the NMW, seeing a role for the tax and transfer system in assisting these household types.

Finally the Commission acknowledged that it had taken into account the impact of its other recent decisions, notably the penalty rates decision, but that it was not appropriate to apply these factors to its NWM determination in a ‘quantifiable or mechanistic way’ (Fair Work Commission, 2018: 93).

Declining skill-based earnings premia

One of the consequences of NMW decisions consistently outpacing general wages growth is a decline in the premium received by workers with post-school qualifications. As shown in Figure 2, in 2004 the median weekly earnings for an employee with a postgraduate qualification was 219% of the median weekly earnings for an employee with no post-school qualifications. By 2017 (the latest available data), the proportion had decreased to 188%. The premium for employees with Bachelor qualifications declined from 170% to 160%, and for employees with trade-level Certificate III/IV qualifications the premium declined from 136% to 129%. The reduction in the earnings premia is consistent for males and females, except for vocational-level qualifications for females, which were already the lowest and which have showed little or no change.

Overall, the figures point to a reduction in the relative value of postgraduate qualifications, in particular in the labour market. However, a more detailed decomposition analysis would be required to determine how much of the decline in the wage premia for workers with post-school qualifications can be attributed to a shift within segments (e.g. comparatively lower paid social workers making up a larger proportion of workers with Bachelor degrees) and how much is due to structural shifts affecting entire segments (e.g. growing casualisation among higher education-qualified workers reducing the median wage for workers with postgraduate qualifications).

Agreement making

Previous reviews have noted a secular shift in agreement making over the last 5 years, with sharp declines in the proportion of workers covered by enterprise (collective) agreements and a commensurate increase in the proportion of workers covered by awards, the National Employment Standards or common law arrangements. In 2018, headline figures masked a continued decline in private sector collective bargaining coverage (both the number of enterprise agreements and the proportion of workers covered by federal enterprise agreements) that had been featured in recent annual reviews. At the end of the March quarter 2018, there were approximately 1.78 million employees covered by federal enterprise agreements, and the number of current enterprise agreements (12,733) was the lowest it had been in the series (Department of Jobs and Small Business, 2018: 15). When considered by sector, the public sector has been relatively consistent over the preceding 3 years (decreasing only slightly from 624,300 employees covered in March 2015 to 616,300 employees in March 2018). By comparison, the decline in private sector coverage was much more substantial: a 35% fall from 1.79 million employees in March 2015 to 1.17 million employees in March 2018. However, there were more agreements approved in the year to date than the corresponding period in 2017, and the Average Annual Wage Increase results were higher (Department of Jobs and Small Business, 2018: 14).

The politics of agreement making were more subdued in 2018 than in recent years. There were far fewer contentious terminations of agreements (or threats to do so). Although the Australian Labor Party (ALP) had not released its workplace relations policy as at November 2018 (due to the delay in its national conference), it has signalled a willingness to strengthen collective bargaining rights for employees and unions, such as removing restrictions on industry-wide or pattern bargaining (Hannan, 2018). Employers may be signalling a willingness to engage in bargaining and lock-in agreements in anticipation of a potential shift should Labor win the next federal election expected in the first half of 2019.

Immigration – labour supply

Arguably the most contentious labour market issue in 2018, and one with long-term implications for the state of the labour market, was the level of migration, particularly skilled migration. Although there are many categories of migrants that feed into the labour supply, Australia is notable for the heavy emphasis it places on skilled migration, both permanent and temporary (Oliver and Wright, 2016).

The number of permanent migrants accepted in 2017–2018 was 162,417, a 10% decline on the previous year that included 12,468 fewer skilled migrants (Department of Home Affairs, 2018a). The government attributed this to fewer applications meeting the criteria as a result of stricter scrutiny.

There were also substantial reductions in the number of temporary skilled migrants, following the replacement of the s457 scheme with the Temporary Skill Shortage visa categories (subclass 482) on 18 March 2018.

Under the new arrangements, there are now three occupation lists: the short-term skilled occupation list (eligible for 2-year visas), the medium and long-term strategic occupation list and the regional occupation list (which are each eligible for 4-year visas (Department of Home Affairs, 2018b). Approximately 200 fewer occupations are eligible for short-term visas, and the pathway to permanent residency has been removed except for the 4-year visa options. Eligibility requirements were also tightened to require at least 2 years' work experience in the occupation, and English-language requirements have been tightened.

The changes to temporary skilled visas have coincided with a substantial decline in the number of primary temporary skilled visa applications, from 54,820 in 2016–2017 to 39,230 in 2017–2018 (Department of Home Affairs, 2018b: 4). There was a corresponding decline in the number of visa applications granted (46,480 in 2016–2017 reduced to 34,450 in 2017–2018). By industry, the largest declines were in Rental, Hiring and Real Estate Services (−65.0%); Mining (−61.3%) and Public Administration and Safety (−56.3%) (see also Table 7) (Department of Home Affairs, 2018a: 9). Since June 2013, the number of visa applications granted has declined by nearly half (49.7%). The same industries have experienced the largest declines since 2013, followed by construction, for which the number of visa applications approved declined 72.9% between 2013 and 2018.

The changes are yet to have a dramatic impact on the occupational composition of temporary skilled visa holders: the top 15 occupations remain dominated by the hospitality (e.g. chefs), medical (e.g. general practitioners), information technology (e.g. development programmers) and education (e.g. university lecturers) fields (Department of Home Affairs, 2018a: 13; Department of Immigration and Border Protection, 2017: 13). Occupations that were prominent in 2014 that no longer feature in the top 15 are business and financial (e.g. marketing specialist, accountant (general), management consultant) (Department of Immigration and Border Protection, 2014: 13).

Nonetheless, there continued to be calls throughout 2018 to restrict the level of overall migration, particularly the number of migrants settling in Sydney and Melbourne. The Premier of New South Wales called for the number of migrants settling in her state to be halved (McGowan and Evershed, 2018). Prime Minister Scott Morrison announced that he would support a further reduction in the level of permanent migration if that was the recommendation from the state and territory governments (Shields, 2018).

This was partly offset by calls for greater numbers and new visa classes for agricultural workers and others who would settle in regional areas. The National Party was agitating for a new class of visa for farm workers, amid claims that the existing Seasonal Worker Program and the Pacific Labour Scheme arrangements with the Pacific Island nations were not producing an adequate or sufficiently reliable flow of workers (Howes, 2018). Regional employers also rely heavily on the working holiday visa scheme (Howe et al., 2018). As the year drew to a close, there was no sign that a new visa category would be introduced. Instead, the government relaxed the eligibility criteria for working holiday visas, extending the option of a second year to visa holders who worked an agriculture job anywhere in regional Australia (a second year was previously restricted to those working in northern Australia) (Department of Home Affairs, 2018c). In addition, visa holders will now be able to stay with the same employer for up to 12 months (from the previous 6 months) and may qualify for a third year. The list of eligible countries was expanded and the age limit for Canada and Ireland increased to 35. The government also announced plans to remove unemployment benefits from jobseekers wherever they might live if they refused to take even temporary work in the agricultural sector (Berlage, 2018).

Table 7.

Change in temporary skilled migration by industry, 2013-2018 (12 months ending 30 June).

	30/06/2013	30/06/2014	30/06/2015	30/06/2016	30/06/2017	30/06/2018	% change 2017-2018	% change 2013-2018 (est)
Accommodation and Food Services	6790	6270	6050	5510	5130	3700	-27.8	-45.5
Administrative and Support Services	290	320	380	340	330	240	-26.7	-17.2
Agriculture, Forestry and Fishing	1390	880	860	720	950	910	-3.8	-34.5
Arts and Recreation Services	820	590	540	560	620	390	-37.1	-52.4
Construction	7870	4740	3970	3000	3400	2130	-37.3	-72.9
Education and Training	3460	2860	2810	2330	2500	1940	-22.4	-43.9
Electricity, Gas, Water and Waste Services	1200	840	570	370	450	490	9.1	-59.2
Financial and Insurance Services	2360	1750	1710	1690	1740	1100	-36.9	-53.4
Health Care and Social Assistance	7430	5150	4630	4810	4920	4570	-7.1	-38.5
Information Media and Telecommunications	6700	5820	6990	6880	6000	4060	-32.3	-39.4
Manufacturing	3800	2350	2410	2070	2010	1440	-28.3	-62.1
Mining	4630	2670	1850	1090	1030	400	-61.3	-91.4
Other Services	8440	7210	8289	6240	8050	5940	-26.3	-29.6
Professional, Scientific and Technical Services	5580	5070	5820	6490	6150	5030	-18.1	-9.9
Public Administration and Safety	560	380	220	160	170	70	-56.3	-87.5
Rental, Hiring and Real Estate Services	440	300	340	230	230	80	-65	-81.8
Retail Trade	3070	2440	1880	1650	1640	1110	-32.2	-63.8
Transport, Postal and Warehousing	1000	860	790	540	570	390	-31.9	-61.0
Wholesale Trade	1610	1120	920	700	630	450	-27.9	-72.0
Not specified	1070	330	130	20	10	10	80	-99.1
Total	68480	51940	51130	45400	46480	34450	-25.9	-49.7

Note: Figures have been rounded by the Department of Immigration and Border Protection/Department of Home Affairs. Consequently Totals and percentage calculations may not match.

Source: Department of Immigration and Border Protection (2014, 2015, 2016, 2017); Department of Home Affairs (2018b).

The scale of the wind-down of skilled migration has implications for the future state of the Australian labour market. A sustained reduction in the number of temporary and permanent skilled migrants may lead to higher wage growth (although there is little evidence that the reduction in the number of temporary skilled migrants in 2014 had much of an impact). However, this is likely to be concentrated in those occupations and sectors that have been most reliant on skilled migration. Further, any effect is likely to be offset by the increasing numbers of Australians participating in higher education and vocational education and training. Domestic undergraduate enrolments increased 35% to 805,344 between 2009 and 2017, when government funding for subsidised places was uncapped (Department of Education and Training, 2018a). Growth was particularly strong in health (65% increase), information technology (62%) and the natural and physical sciences (55%). Graduate employment rates have begun to rebound in last 3 years, after falling to levels not seen since the 1990s recession: the proportion of Bachelor graduates in full-time employment declined to 68.1% in 2014; the level in the 2018 survey was 71.8% (Department of Education and Training, 2018b). And although the overall growth in VET enrolments has not been as strong, and there have been declines in the government-funded TAFE sector, there has still been a 5% increase in the number of apprentice and non-apprentice VET enrolments between 2015 and 2017 (National Centre for Vocational Education Research, 2018). There may further be increases as a result of the Commonwealth Government's investments through the Skilling Australians Fund.

Conclusion

Overall, the Australian labour market in 2018 moved into a period of strength, with strong employment growth, low unemployment and falling underemployment. While job growth was broad-based across industries, there were declines in the low-pay sector, and growth was concentrated in part-time roles. Collective bargaining coverage continued to fall to historic lows, driven by declines in the private sector. In this context, where employers can better differentiate pay rates, wages growth remained modest, despite an increase in the NMW of 3.5% being greater than that of previous years. However, as labour underutilisation falls, pressure on wages may grow, aided by a tightening in labour supply caused by lower levels of skilled migration. This sets the context for another federal election in 2019, in which labour market and industrial relations will be prominent and contested. Voters will expect the parties' policies on wage growth and collective bargaining, the regulation of work in the gig economy (discussed in the 2016 review article), skilled migration, and skills and workforce development generally to respond to the pressures identified in this article. Overall, the question in voters' minds will be the mechanisms by which work and its rewards can be regulated and distributed more fairly.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship and/or publication of this article.

Damian Oliver is an Associate of the University of Technology Sydney Business School. His research examines the connections between education and training policy and industrial relations policy.

Serena Yu is a Senior Research Fellow in the Centre for Health Economics Research and Evaluation at the University of Technology Sydney. Previously, she was a Senior Research Analyst in the Workplace Research Centre at the University of Sydney. Her research interests include labour economics, health economics and public policy.

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