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It is a peculiarity of the Australian labour market that when under pressure, it tends to reduce hours rather than headcount.
This is very different to the US, which slashes and burns, and is more like Europe, where unions and employers agree to reduce hours. In Germany in particular, this phenomenon is called Kurzarbeit.
Having observed multiple labour market cycles in Australia, I can confidently say a similar system operates here. IT is not official like it is in Europe, making it more flexible.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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