Insecure work driving workers into dangerous debt

For Deb Shroot, when the phone rings at work it is rarely good news.

As a financial counsellor with the National Debt Hotline, she is often the first point of contact for people who have found themselves in financial distress.

Australian workers are grappling with the triple whammy of the soaring cost of living, flat wages growth and the prevalence of precarious work. It’s a dangerous economic equation that has seen many workers tumbling through the trapdoor into unmanageable debt.

A recent report in The Sydney Morning Herald identified a nasty by-product of the cost of living crunch caused by Morrison Government neglect. Buy-now-pay later operators and payday lenders are taking full advantage of the financial crisis many workers are facing.

Ms Shroot told On the Job she is hearing a familiar story from workers who make the call to the hotline.

Those who find themselves in a damaging debt cycle come from all walks of life and circumstances, but even so, Ms Shroot finds herself hearing a recurring story.

“The combination of the cost of living going up, particularly rents, and more recently petrol, has really put people under a lot of pressure,” she says.

“There’s also the hang-over from the pandemic with regards to reliability of work. There’s people who’ve had very insecure work, especially casual workers, or people who were on contracts and aren’t getting enough hours and are still on very casual arrangements.”

 “So they might have enough money one week, and then not the next, so we’re getting a lot of calls,” Ms Shroot says.

Nine years of Coalition Governments have seen an explosion in the number of workers who find themselves navigating their way through a trapdoor economy. A single trip-up could see them falling through into a crisis situation.

More workers than ever are “grape vining” from job to job, week to week, hoping to earn enough to put food on the table and pay the rent. Now with ballooning living costs, that grape vine has snapped.

Recent figures from the Australian Bureau of Statistics show the number of Australians with secondary jobs is at an all-time high of 954,000, a whopping 11.5% increase on the previous quarterly figures.

ACTU Secretary Sally McManus is adamant the failure to provide decent, secure jobs is driving workers into financial trouble.

“Working people are struggling to keep up with the cost of living, and this new record shows how desperate the situation is becoming for hundreds of thousands of Australians,” she says.

“When the Morrison Government talks about how many jobs have been created, they never mention that these are insecure jobs being taken up by people already in other insecure jobs,” Ms McManus says.

Ms Shroot often takes calls from workers who are bewildered about how they’ve found themselves in financial trouble. They’re working harder than ever, but find themselves going backwards.

“Maybe they had a couple of loans or credit cards they were able to manage fine, and then something has happened. So that might be a drop in their wages, or maybe someone got sick, or there was another life changing event such as separation or family violence, and they just haven’t been able to catch up,” Ms Shroot says.

“Unfortunately, another thing that we’re finding is people tend to go for more credit to cover the debt or the expenses that they’re not managing.”

The recent federal budget was silent on the issue of providing secure, decent jobs. 

Scott Morrison acts as if the struggles of those in unreliable jobs are, like most things, not his problem.

What does it say about this government that hard-working Australians are having to put themselves at the mercy of predatory pay-day lenders to buy groceries and clothes for their children?

Ms McManus recognises lack of secure work is not the only threat to the wellbeing of workers and their families. Real wages are going backwards, and Scott Morrison has no plan to deal with it.

Couldn't be clearer pic.twitter.com/F091N4aK4n

— Sally McManus (@sallymcmanus) March 31, 2022

“The cost of living crisis has been caused by almost a decade of record or near-record low wage growth which has been ignored by a Government that has gone missing when working people need them.”

“The best the Prime Minister can offer workers in this budget is 1 per cent real wage growth by 2025/26, with wages going backwards in real terms through the first half of this year.

“One-off payments are not a substitute for real wage growth which keeps wages moving forward. Increases in rent, heating, childcare and other essentials are not one-off.”

“The Prime Minister could take steps to create wage growth tomorrow. He could support a meaningful increase in the minimum wage and as one of the largest employers in the country he could support fair wage rises for his own employees, instead we have one-off payments designed save his own job.”