ASSOCIATE PROFESSOR TAMSON PIETSCH: Twenty years is a span of time we can imagine. It’s a time we can conceive. And it’s time enough for serious change. What kinds of work will we be doing in 2040? What industries will still be going strong and which will have fallen away? The training and education we need now will depend on the kinds of work, the industries and services around which as a nation we want to build our economy and society.

ASSOCIATE PROFESSOR TAMSON PIETSCH: So setting the agenda now is crucial. Welcome to The New Social Contract. I’m your host, Tamson Pietsch.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And today we’re looking at universities and the nation’s workforce.

ASSOCIATE PROFESSOR TAMSON PIETSCH: If we are to live within the boundaries of this planet’s finite resources, what jobs will be needed for the future?

ASSOCIATE PROFESSOR TAMSON PIETSCH: And how might this shape the kinds of teaching and research that universities do? Right now, Australia is facing possibly the worst economic downturn in its history. And this is without the possible consequences of a second wave of infection.

NEWS GRAB ‘From Back in Black to recession’, reported on AM, ABC, June 4, 2020: Twenty nine years after the recession we had to have comes the one we couldn’t avoid.

NEWS GRAB The recession we couldn’t avoid’ on RN Breakfast with Fran Kelly, Abc, June 4, 2020: Is Australia in recession today? The answer to that is yes.

NEWS GRAB ‘Treasurer Josh Frydenberg says Australia has officially entered recession’ from ABC News, June 2 2020: Josh Frydenberg didn’t utter the R word, instead painting the grimmest of pictures.

NEWS GRAB ‘Treasurer warns the worst is yet to come as Australia’s economy enters recession’ from ABC News, June 3 2020: This was the economist’s version of Armageddon.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Recovery from periods of high unemployment rarely happens quickly. And the Corona crisis is likely to have far reaching consequences affecting all aspects of our economy and community for years to come. So how should that sobering prospect reshape the relationship between universities, government and society, including industry?

ASSOCIATE PROFESSOR TAMSON PIETSCH: To help me with this big conversation I’ll be speaking with two people who have different takes on what this future should look like.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Alison Pennington is a Senior Economist at the Centre for Future Work, which is part of the Australia Institute.

ALISON PENNINGTON: The private sector can’t pull us out of this decline. It’s going to have to be long and sustained public spending and planning and the kinds of levers and coordination that we would expect from government in any type of depression. And that’s what we had in the 1940s coming out of the reconstruction. And that’s the kind of reconstruction and planning that we need today.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And Megan Lilly is Head of Workforce Development at the Australian Industry Group, or AIG, Australia’s peak industry association.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Megan is also the chair of Manufacturing Skills Australia and has been a member of several industry and skills groups.

MEGAN LILLY: I don’t think anyone can realistically expect to exit their qualification, get a job and stay in that job for their working lives. Those days are long gone.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Megan says the days of a job for life are long gone. What kind of workforce and industries does Australia need to be educating and skilling people for, both in the context of the post-COVID economic recovery and also further into the future?

ASSOCIATE PROFESSOR TAMSON PIETSCH: It’s a big question I know, Megan, but what do you see as the future of work?

MEGAN LILLY: It’d be really good if I had the definitive answer, but I don’t actually think anybody does. So we really need to look at the trends and what we can see emerging. But just in relation to the COVID part of that question, the first thing I’d say is, I don’t know that COVID is necessarily changing the future of work, but it might be certainly accelerating aspects of it. So I think, you know, a lot of the directional stuff was already in place. But I would make, with the possible exception, that I think we’ll see a lot more manufacturing actually happen domestically, the one thing the pandemic has brought out is that we have some disrupted supply chains at the moment in the country and that there is a lot more of an appetite to actually rebuild some of those supply chains domestically, which will mean enhanced manufacturing. Having said that, I don’t know that we’re necessarily going to go to a situation where people will be happy to pay a lot more for certain things. So that’s got to be to play its way out somewhat. Manufacturing was already undergoing the process of becoming much more high tech advanced manufacturing, for example, and including some automation. But more importantly, it was probably digitalisation. And so we were seeing manufacturing transform an industry more broadly transforming. And I think that that will be a bigger piece going forward.

MEGAN LILLY: There is a view, it’s a view I don’t share, that the automation will increase and reduce employment or reduce employment opportunities. I’m actually at the school of thought that automation and digitalisation actually create work and create jobs, but they create different jobs and they, by and large, more highly skilled jobs. And they’re the people jobs that work in conjunction with automation and digitalisation and the problem solving element. So I actually think that that is something that we should embrace. But I think really the skills that people will need, regardless of which jobs they’re in go forward are going to be the people’s skills. So the problem solving, communicating, teamwork, all of those types of skills will underpin more or less every job. And so it’s that skill base combined with technical skills or contextually developed skills, that’s going to be the requirement into the future. And that’s where the future of work will sit. So I think that that becomes the focal point.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Alison, your a Senior Economist at the Centre for Future Work and your organisation conducts and publishes progressive economic research on work, employment and labor markets. What does Australia need to be educating and skilling people for? What do you think is the future of work?

ALISON PENNINGTON: Well, it’s a pretty unusual time for us to have this conversation, although in some ways the right time. I think it’s worth taking account of the scale of the economic challenge that faces our nation and the globe. It is actually a type of contraction that’s going to be worse than the Great Depression – we’re talking over 20 percent decline in GDP. And if you adjust the current unemployment rate for people who are on the Job Keeper payments, people who’ve lost hours, our realistic unemployment figure is something like 2.5 million people or about 20 percent of the labor market. So it’s a discussion about what the future of jobs is. It does have to start from a recognition that the number of people that we need to be mobilizing and putting in the into work is just so vast. You know, as we move out of this liminal space where we’re consistently told that only the private sector can determine what the future of jobs are, we need to be saying more and more that this is a democratic discussion and a collective discussion about what kind of future jobs do we want. So it’s very clear that if you are working in an essential service, there’s a good chance your job is secure and there’s a good chance that if you wanted a job in the near future, you should be angling for something in healthcare, education, you know, all of our essential services. Logistics, cleaning even so, anything that’s required to keep the economy ticking over and providing basic essentials is going to be the work that will be in demand.

ALISON PENNINGTON: Of course, the problem is that work is quite often underpaid, low paid and often has poor conditions. But then the other thing that’s happened in this crisis is a very trade exposed economy like Australia that has operated on the basis that we can link our trade networks into these Just-in-time supply chains means that we have depended on buying cheap imports, cheap manufactures from our neighbours. And when global production studies, in an event like a global pandemic and a global recession, a country like Australia has been very exposed. So in it, in the most immediate sense, we rely on importing something like 96 per cent of our medical goods. So that’s the first clear area that we say, hey, if we’re going to pull through this pandemic, we need to be able to produce and manufacture medical goods, the things that we need to keep our population safe. And that and that expands to all the other essential manufacturers that we also depend on. Even stuff like chemicals to treat our water systems like we import all of these. And if we lose the ability to stockpile them anytime soon, then our water supplies are completely undermined. So it starts there and it emanates out from that because we look at the challenge before us with climate change. You say, how well is the Australian economy kitted out with the right manufacturers? Is our housing apt for the future?

ALISON PENNINGTON: You know, there’s there’s so many ways that we can say that manufacturing is going to be a pretty clear sight for future job development purely because we just can’t produce the stuff that we need right now.

ASSOCIATE PROFESSOR TAMSON PIETSCH: The weaknesses in the global economy and Australia’s reliance in particular on international supply chains have been exposed by COVID. Megan and Alison both agree that high end manufacturing is a potential area to invest in to secure Australia’s future. Megan, what do you think it would take to build a more resilient economy in the wake of the disruptions of COVID-19?

MEGAN LILLY: It is about understanding and getting sustainability in those supply chains so that you don’t find the weak point that then can actually create a whole set of problems.

MEGAN LILLY: And, you know, I’ve been talking to many companies over this period of time. And, you know, one company was manufacturing a five million dollar piece of machinery and they were just missing a few really small parts that they used to import from China. It took them a long time to actually find somewhere else to source them from. So that’s just one example of the supply chain not functioning. But where it becomes more critical is the supply chains that are attached to health or food or energy, those sorts of things so with those things need to be considered. The other opportunity on the table at the moment too is to rebuild jobs in a sustainable way in terms of environmental impact and actually have a look at carbon emissions. So actually building the recovery of the economy and the environmental impacts in together to try and get more sustainable jobs. And technology is an important part of that solution too.

ASSOCIATE PROFESSOR TAMSON PIETSCH: So Alison, if one of the elements of a more resilient economy is a high quality domestic manufacturing capacity, what kind of systems approach is needed to reach that goal, starting with, say, raw materials and moving through to workforce needs, training, production, but maybe also technological development and maintenance? I mean, thinking about all these things together, how might that change the ways we go about planning for future work?

ALISON PENNINGTON: The skill system is not well set up for even just the start of that manufacturing challenge. And it’s been on record for some time that the distinction that the post-secondary education system makes between vocational technical skills and knowledge and intellectual labor of academia. This is a false distinction. It’s being peddled out alongside class division. This idea that the VET sector and TAFE is where you go if you can’t succeed in finishing school and pursuing a better career. And university is where you go if you want to succeed and get a secure and stable career. Government isn’t doing enough to create the conditions where we can actually create a advanced manufacturing sector. So we’ve got this pretty unusual situation where you have some universities have tried to manifest those conditions kind of play, make believe in the hope that getting these graduates up to speed with combining both their theoretical knowledge that you would normally ascribe to academia, but then applying that knowledge through technical skills and manipulation of products. And that’s what advanced manufacturing is about. And that’s the kind of education system that places like Germany have been rolling out now for decades.

ALISON PENNINGTON: And so, you know, it’s partly why they’re a manufacturing powerhouse and why there’s meaningful, decent careers for people who you get to combine both theoretical and technical expertise.

ALISON PENNINGTON: So I think that’s one example of where we’d start is like, how is it that our skill system is actually preparing people to acquire the right skills I need? And then you look on the other side of that equation, of course, industry policy is another gaping hole in Australian policy. Now, for decades and we’ve packed up our manufacturing sector, we’ve had no plan about what to do when we said goodbye to over 200,000 manufacturing jobs.

ALISON PENNINGTON: Those people have often gone into insecure work that didn’t use any of their skill sets. We didn’t use those skills, didn’t build on them. And the other side of that is we need to be talking about what sort of levers can government use to support the development of a advanced, efficient, high productivity, export oriented manufacturing sector, which is the future that we need to be moving towards.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And you clearly see government as having a big role to play in that. Others think that perhaps there are incentives that can make that a business led development.

ALISON PENNINGTON: I think we need to be using all of the levers and all of the options available to us.

So that could look like direct government investment in new capital because it’s very expensive to set up these high productive manufacturing operations. There are examples like Korea and Sweden where they have public banks that directly provide injections of funding to develop that capital. And then there is a whole bunch of incentives and levers that can be developed that, you know, whether that means government providing investment on the condition that the private sector come to the table, more direct sorts of tax incentives for writing off capital costs. It’s about crowding in I think at this point, because the private sector can’t pull us out of this decline and can’t pull us out of this mess now it’s going to have to be long and sustained public spending and planning and the kinds of levers and co-ordination that we would expect from government in any type of depression. And that’s what we had in the 1940s coming out of the reconstruction. And that’s the kind of reconstruction and planning that we need today. It’s not just private sector, it’s not just government. But we definitely need to be having a democratic collective discussion about if we’re mobilising these types of public resources, how can we get the private sector to the table and make that investment work in the public good rather than just in the interests of a few people.

ASSOCIATE PROFESSOR TAMSON PIETSCH: I mean, in the 1940s, one of the things governments did was put a whole lot of professions on a reserved list.

ASSOCIATE PROFESSOR TAMSON PIETSCH: University students in areas like medicine and agriculture and engineering were not only funded to do their education, but their study was designated as a form of national service. Do you think there are particular areas that governments should be investing in now when it comes to training?

ALISON PENNINGTON: Yeah, I think that it’s quite clear that we’ve had a huge problem in created by the privatisation of our social services sectors. These have created untold harm to individuals and families and communities and workers in these industries. Those those privatisation experiments have yeah utterly failed. They are the vocational education system, which has been in disarray for, you know, the last five, six, seven years before the universities got to this point of being left out of income support from government. And then we’ve also got the aged care sector. We’ve got the disability services sector, community services, really all of the expanded social services systems that were expanded during the neoliberal period could all be improved and all require strong investment to expand the number of jobs available, to decrease the ratios that some of these workers are having to deal with, but also lift the level of skills because there’s been just complete race to the bottom on the skills front as well, in order to basically cheapen labor and make it cheaper to run these things.

ALISON PENNINGTON: So I would say that government should absolutely focus on investing in the professionalisation of high skill social services and health care work, and that goes for education, too. And then I think the manufacturing question is a pretty clear one. We could easily look at the type of public investment we need in infrastructure, environmental, all of the investments we need to reach sort of feed out our economy to deal with climate change. And that’s going to be very specialist sort of work.

ALISON PENNINGTON: I think we need to be protecting the work of engineers and people who start to straddle that applied engineering space because that sort of flexible and creative and innovative applied work is the kind of stuff that we’re going to need I think.

ASSOCIATE PROFESSOR TAMSON PIETSCH: So we’re hearing the term skills talked about a lot at the moment, not least from the Prime Minister and the Minister for Education. Megan, when people talk about skills and reskilling, what do they mean?

MEGAN LILLY: I think that’s a good question, because the word skills is actually often used as shorthand for quite a number of different things. It isn’t just doing manual stuff. It’s really about work and jobs. And so when you talk about skills, you can equally be talking about the skills of a graduate engineer to a an apprentice or a tradesperson or anything in between. And so when we talk about skills, we’re really talking about what people do in work and they can do many things and then they can work in white collar environments and production environments. In the conversation, I think we shouldn’t narrow it down to just sort of manual application of task, because that is absolutely not what we’re talking about.

ASSOCIATE PROFESSOR TAMSON PIETSCH: But there’s a lot of really different ideas about what those skills mean on the one hand, and also how you might teach them on the other. I asked Alison what she meant when she used the term skills and which skills she thought were in short supply.

ALISON PENNINGTON: Well, when we talk about skills, we’re talking about the basic competencies that people combine. If we’re talking about a workplace situation, it’s too to apply and navigate the performance of labor effort.

ALISON PENNINGTON: And it’s an area that’s fraught with contention because quite often and leading up to this crisis, and I expect that we’ll hear these calls from employers more and more about skill shortages. And, of course, we need to be able to point to the fact that there’s 2.5 million people who are unemployed. Any notion of a skills shortage should immediately be responded with, ‘Well, why aren’t we developing the skills pipeline to fill those holes?’ And quite often a skills shortage exists because employers are unwilling to lift the wage. And often you lift the wage and suddenly someone magically appears. Employees have become very content and they’re used to be able to get their pick of the end of the underutilised labor market. They can pick who they want and that’s why they keep bleating on about skills shortages. At the same time that they’ve talked about skills shortages, we’ve seen a huge decline in employers investing in the skills of their workforce.

ALISON PENNINGTON: And that’s a lot to do with our industrialisation system and the way that wages have become the main basis on which employers are competing with each other and not actually thinking about how to lift the overall skills basis of my workforce so they can actually compete based on the quality of the product they do rather than just how cheap they’re working for. So I think that we’re going to have to need a complete turnaround in the way that we frame skills in the workplace, because at this point, do not trust the private sector to be leading that trajectory. We already know that they’re mostly putting their efforts into cutting wages right now, which again, would that would just be disastrous for the skills basis of the Australian workforce.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Given that Megan Lilly has been a member of a number of industry and skills groups, including the National Skills Standards Council, the Victorian Skills Commission and the Queensland Industry Commission, I wondered what role she thought employers should play in deciding questions about how to skill their workforce.

MEGAN LILLY: I think employers need to pay a very significant role. So I’ll just be clear, from the beginning. I do think a lot of what tertiary education is about work, but it is not only about that. So please understand that I, that advance critical inquiry, I’m not diminishing that at all. That and I’m not just saying that we need to educate people just so they get a job. I think that that’s far too simplistic. But I think we need to be out to educate people so that they can participate actively in productive work. And that needs to be informed by, you know, a good, strong knowledge base and the capacity to ask all of those questions and inquiries. I think the stronger the partnership, the better the outcome with employers and educational institutions and indeed the students going through those experiences. And I think increasingly employers will need a highly skilled workforce, a highly educated workforce. And I think every indicators suggesting that to us for a long period of time, I don’t see that shifting or changing. A lot of education can actually happen in the context of work. And that’s that ongoing learning and developing and training piece. But I also think, I think there’s a tremendous opportunity at the moment with the revised Australian Qualifications Framework.

MEGAN LILLY: And I was actually on that panel that came up with the revisions, is an opportunity to implement them and actually then use that framework over time, redevelop our product suite so qualifications in a way that actually creates a more coherent suite of qualifications. It better balances the relationships between knowledge, skills and knowledge and application, and it enables much more greater capacity in the individual to actually traverse a number of qualifications or different levels for different purposes, but in a non-hierarchical way and I think moving to a non-hierarchical approach would be a really good thing to do, because the way people learn and work in their life isn’t just a ladder that goes up. It’s much more diverse and complex than that. And we should have a framework that enables us to recognise that. So if we got that bit right and we use the opportunity, it’s right there at the moment, we really could then find better coherence in vocational and higher education to create a more coherent tertiary education sector that better supports people in work. To get work in work and to keep work or keep, you know, have a sustainable career. And, you know, resilience in the labor market is going to be an incredibly important thing.

MEGAN LILLY: The other thing that then wouldn’t be challenged is then what do our institutions look like and do we have them divided in the way we do now? And I think that that would be a tremendous conversation to have. But I would also challenge that our institutions shouldn’t look like what they do now, and they won’t in any case, because I think the relationship between workplaces, communities and institutions whether they’re TAFE or universities will continue to merge and blend and so they should.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And if that world of work is changing in the ways that, you know, you’re sort of predicting it or you’re predicting unpredictability.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Do you think there are specific areas that we should be investing in? Is there a kind of direction, a role for planning in focusing training in one area rather than the other?

MEGAN LILLY: This whole pandemic exposed the importance of digital skills. Digital literacy is incredibly important, and without it, people will get seriously left behind. But literacy is sort of the base level of functionality, so there’s also much more a higher ordered versions of skills that are required as well. But I really just think that capacity to be adaptable and flexible is going to be incredibly important now, because I don’t think anyone can realistically expect to exit a qualification, get a job and stay in that job for their working life. Those days are long gone.

ASSOCIATE PROFESSOR TAMSON PIETSCH: So what are we looking at then? If not that sort of lifetime career in one sector?

MEGAN LILLY: Well, some people it’ll be different for everybody. So some people will have multiple jobs and multiple careers. There’s a lot of research to suggest… And some jobs will get massively disrupted by technology. So anything that’s rules based has the potential to be disrupted by technology and disrupted to the point of some of them no longer existing. And so that’s actually starting to push into white collar jobs more than had previously been the case. But the other thing that will happen is that there’ll be a lot of shifting within a job. So the name of the job might stay the same, but research tells us that up to 50 percent of those jobs, the actual skills and applications within the job will shift. And so just because you are a plumber doesn’t mean you do what plumbers did 20 years ago actually within the job would be significantly different. And so, in a way, it doesn’t matter if you’re talking about sort of a trade based job or white collar job. We shouldn’t confuse the title of the job that we know so well with actually what people now do in those jobs. And so that shift will be continuous. And sometimes it’s very subtle, too. So people don’t realise the ships that have been made, but digitalisation and automation will be able to transform many, many jobs.

ASSOCIATE PROFESSOR TAMSON PIETSCH: I guess historically and I’m a historian, so, you know, here’s my confession. Workplaces have or industry groups, you know, employers have taken responsibility in the 20th century for training workers on the job. So as the nature of work has changed, that has been something that has happened within the workplace. It sounds like you’re predicting a kind of future in which education providers will provide some of that upskilling or retraining to enable people to continue their work.

MEGAN LILLY: Yeah. I think that’s right. So I would but then there might also be in the workplace, too.

MEGAN LILLY: So it’s not just the employers doing it themselves. There will be potentially the external party can come into the workplace or employers please can go to, you know, institutions. But so I think the institutional notion of education and training is sort of one entity in the workplace is another entity that that’s sort of barrier will break down continuously. And so I think, you know, the future of universities is to sort of be everywhere, to be in the workplace, to be in the community. And also, you know, in their own institutional remit.

MEGAN LILLY: So I think those borders or boundaries there, what will go, that’s what will disappear and that’s what will change. And so, in a way, the opportunity is for the universities to become more ubiquitous.

ASSOCIATE PROFESSOR TAMSON PIETSCH: I guess that chimes with the idea of lifelong learning, which isn’t new, but which is being advocated so widely these days. But whereas the current competitive job market puts responsibility for training and upskilling on individuals, Alison Pennington thinks there’s another more promising education to job pathway that could be developed and even enhanced.

ALISON PENNINGTON: Australia has, like other liberal market economies. It’s created a very Dog-Eat-Dog system with the expectation that individuals navigate the wilderness completely alone.

ALISON PENNINGTON: And that’s those from, so it starts in high school. You’re told to basically choose a career when you’re a teenager and start actively working towards building that career. And the idea is it’s always on the individual to reach that outcome. Well, I think we have to recognise that that kind of very Wild Wild West approach to education, to jobs it’s so inefficient and so wasteful and in an economic sense. But it’s also really unfair on individuals who are, you know, having to bear all that pressure. And it’s not normal. I think there are lots of economies in the world, and particularly in Europe, where the education to jobs pathway is far less fraught with hiccups and bumps. And it’s far more efficient because it actually recognises by creating those pathways, you’re getting people into meaningful and decent work, often decreasing the cost of unemployment and dislocation among youth. And it’s a recognition that all social partners are part of building that pathway. The problem of this liberal market model in Australia and others is that we kind of go, well, is it the responsibility of the individual or shall we point the finger at employers and say, hey, you should be covering the costs and investing in your workforce, building up their skill sets? And I think we can’t expect that if employers like they operate on a profit incentive.

ALISON PENNINGTON: They’re mostly concerned about just increasing their bottom line. So if all the other actors in an economy are allowed to keep competing on the basis of wages, then that’s a public problem. That’s something that we’ve created that we allow our government to do or not do. And I think that we have to have a principle from the start that the rolea of the public sector is to provide education and skills. And a big reason why the whole the whole system comes unpicked, never mind the incentives of employers, but it’s actually the privatisation of the education system. That’s where a lot of the problems start, they manifest out of. We do have some skill shortages in Australia and often around technical trades and occupations. And that’s because of what we did to the VET sector. And that was a disastrous privatisation experiment from 2012, where TAFE, the long held public pillar of delivering grounded, community based vocational technical education, completely had its funding ripped out from underneath it. We had thousands, thousands of all these dodgy private providers flood in. And suddenly we’ve got people saddled with high debts, dodgy qualifications, and employers that are still unwilling to invest in that system. Of course they don’t believe in it because it’s a wild, wild west system.

ALISON PENNINGTON: This is why there must be a role for the public sector in providing, I would say, free education. And then we start to deal with the incentives and how it is that employers start to play in that system. I think we have to start from the basis that education and skills are human rights. Everyone has the right to access those those things in the process of you know, getting to a job, but also just to having a meaningful, decent life and a contribution they can be proud of. In terms of, I mean, pre-pandemic, what OECD data showed us, which compares skills shortages and  the basis level, the base level of skills across a workforce, across OECD countries. It found that indeed Australia has no shortage of technical skills. In fact, we’ve got very high levels of technical skills. What we have a shortage of is some of the more basic grounded competencies to mobilise specific technical knowledge like critical thinking skills, like verbal reasoning, like social communication skills. Like these are, these are actually we had some like quite worryingly, low levels of our basic competencies compared to OECD countries. So this is the area that we need to be focusing on. I think that’s one of the key tenets of a higher education system, is to be not just providing details and rote learning capacity, but actually teaching people how to mobilise, critically, mobilise ideas, apply them in a context and communicate those ideas with people. Because we do know that communication and being able to negotiate and understand challenges and shifting terrain around you is going to be one of the most critical skill sets that we need for for people going forward with all of the policy problems that we face.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And those relational sort of skills were traditionally in the kind of bit of education that wasn’t on practicality, but perhaps was on questions about relating to the world and understanding the world. Those sort of questions around the meaning of things don’t tend to find a place in the discussion around micro credentials, which is emerging at the moment. Do you have worries about the kind of micro credential agenda and what it means for those soft skills that you identify as so necessary?

ALISON PENNINGTON: Absolutely. I think the micro credentialing phenomenon is sort of like the last dying, gasping breaths of the neoliberalisation of education. It basically looks at the most profound policy problems of a jobs market that’s failing to provide jobs. Governments that are failing to invest in long term planning. And it doubles down on this idea that it’s all individuals responsibility. And what should be done is, you know, make busy work, essentially, like if things aren’t working out for you and your current job, you should pick up this sort of micro credential, make a CV look better. And it’s all about individual competition and being able to one up the person next to you as people vie for, you know, less and less decent, full time, meaningful jobs. Not necessarily even meaningful it’s just like decent full time jobs. And without any any attachment of that credential to the real the real jobs market. I think a good example of this farce is what government first did, in fact, it’s I think it’s the only offering they have made to youth in this pandemic period of subsidised short courses, 20,000 positions.

ALISON PENNINGTON: When we are looking at almost a million young people who are either unemployed or completely dropped out labor market and the offering of government is to open up 20,000, subsidised short courses that don’t even lead to jobs. I mean, that’s that’s a joke. I think that it’s a good insight into I think what micro credentialing is really all about.

ALISON PENNINGTON: I think it’s busy work and it’s make do work for a broken education and skill system on both the government side and the education institutions side.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Megan, Australia has a highly educated population. Thanks really to the higher education reforms that were put in place from the early 1990s onwards. Yet we also have a high youth unemployment rate, which is double the rate of the wider Australian population. What’s going wrong in this relationship between education and the job market at the moment?

MEGAN LILLY: Given the economic circumstances of the moment, I mean, you know, a lot of people are estimating youth unemployment will hit 20 per cent or more. And the other thing to remember with youth unemployment is that it takes twice as long to recover to pre-economic downturn levels than the rest of the population. So, you know, they really bear the brunt of an economic downturn. So we should be really concerned about this. If you actually look at it, it’s usually pockets of unemployment, youth unemployment. So it is very place, or geographically based. And I think one of the issues with Australia’s education and training system, particularly if you look at the schooling system, is it’s Australia’s always has been considered to have a long equity tail. And by that what we mean is that the highest levels of achievement are very correlated to socioeconomic factors. So where you’ve got the lower socioeconomic factors kicking in or the more disadvantaged groups, they’re more disadvantaged in terms of educational outcomes and everything. And that’s also where you get the big areas of youth unemployment. So we really need to, at the very heart of the issue, address educational disadvantage at the primary and secondary levels in order to tackle youth unemployment. So it’s a long way to get to that answer. And also, you know, it’s a long way to help solve the problem. So, you know, it’s tricky, tricky stuff that I’m very concerned about, the looming issues with youth unemployment as a result of the pandemic. And we if we don’t do something, we do run the risk of sacrificing a generation of young people that they will only ever be marginally attached to the labor market.And that’s just not something that we should sit by and let happen.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Alison, what do you think young people should be demanding of governments, of employers and of universities?

ALISON PENNINGTON: The world. Where to begin?

ALISON PENNINGTON: Well, I think look, let’s look at what happened after the GFC and what some other governments responses were. And these were off the back of, by the way, pretty massive anti-austerity protests that push for these sorts of outcomes. Sweden instituted a youth guarantee and as a response to public pressure, but also the fact that they just had a far more coordinated economy where they worked with social partners way more. But that guarantee says that every young person has the right to an opportune education opportunity, and that’s free. A job pathway and government invests in basically securing good, meaningful, long term paid work. And if they don’t want to do either of those things, then government provides access to small business startup funds. And so you’re kind of covering the whole gamut there. And I think that that’s the kind of income and skills protections that are that are needed at this point. And I found that the whole discussion since the pandemic really interesting because for young people really like the labour market’s been a bit of a shit show since since the GFC. It’s been declining. The outcomes have been declining for graduates in full time work.

There’s less and less entry level jobs available. They’ve become more and more underemployed, more likely to be unemployed. They’re dropping out of the labour market entirely. And that’s the sign of young people giving up on the world of work entirely. And this was all happening before the COVID crisis. So I really struggle to see how young people are gonna cop it. And then you got a layer on the climate change challenge on top of that. And look at all the momentum that was built from the, particularly teenagers who are leading the climate change movement for young people. And then you layer on top of that basically completely severed pathways to like any security, income security. So I take heart from the fact that we’ve seen some pretty good mobilisations and collective representation and organisation of young people. I also take heart from the fact that we’re looking at the most educated generation in Australian history. And really, history shows if there’s a generation of young people who go backwards from their parents, they do rise up and they do organise. And I’m thinking of you know, like late 60s all across Europe, Paris ’68.

NEWS GRAB The Paris Riots of 1968 ‘French students again clash with riot police, Paris, France’, published by British Pathe on YouTube: In May 1968, France was brought to a near standstill by widespread student protests and the largest general strike since the 1930s

NEWS GRAB ‘The May 1968 protests that paralysed France’, published on Witness, by the BBC: The students were protesting against capitalism and what they perceived as an outdated society.

(AUDIO) May 1968 Paris Riots’ on The History Hour, published by the BBC

ALISON PENNINGTON: That was one of the main markers of that period, were young people having access to education and the world as they saw it, not matching up to their expectations in paid work. And, you know, whatever the powers that be, were offering them. So I think that these things will come out in struggle, like what it is that young people want will emerge over time. But I, I always start from, you know, things like free education, wiping of all wiping of debts, demands for the creation of good, well-paid public sector jobs, a massive expansion of entry level work.

ALISON PENNINGTON: You know the public sector used to be the go to place for young people coming out of university where they could really build meaningful careers.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Alison’s vision of free education was a reality in Australia in the 1970s and 80s, and it continues to be the norm in countries like Germany, Norway, Sweden and France. But Megan has a different view about how higher education and training should be funded.

MEGAN LILLY: Well, it’s sort of basically three payment points in any education and training system. One’s the public purse and one’s the individual, the other one’s the employer. And, you know, ultimately it’s going to be a combination of all of those things. You would hope there would be a good, strong public funding because there’s a very strong public good that comes out of all this, you know, highly skilled, employed, high employment productivity. Increasingly, individuals have picked up some of the tab at both vocational and higher education. Whether it’s true HECS type payments or various other things. Employers actually do invest a lot in education training, but it’s never captured particularly effectively that investment is money, but it’s also time. So, look, I think it depends on which part of the education and training someone is getting as to what contribution all of those three parties make. And I think that will shift further away from the public purse after the initial qualification that governments are going to have to support upskilling and reskilling because, you know, governments need a good, strong labour force as well.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And Alison, what do you say to critics who might say, well, where’s all this money going to come from, all this public money?

ALISON PENNINGTON: From the public money tree and where this comes from is it’s a thing called government prints money. And it’s quite astonishing.

ALISON PENNINGTON: Once once people start it starts to click that we clearly have, you know, almost 230 billion dollars that government had to roll out all of the existing economic programs as the pandemic unferled. And nothing was said at the time that money was spent, as soon as it was spent we were told to get ready to tighten our belts. And what’s remarkable about this incoming depression, I really, really hope that we don’t get to the point where we’ve reached that level of stagnation and destitution. But what’s remarkable about this time is it’s clearer than ever that government has a capacity to take on very high levels of public debt and sustain that public debt. And we have a historical precedent that shows, you know, and I used the 1940s depression example, for 10 years we had market ideologues bleating while we were in destitution, that it was not possible for government to spend and that public debt would become a nuisance. And we put up with that for 10 years before we finally engaged in a reconstruction project, a full fledged national reconstruction project, where we took on public debt that would far surpass the debt that’s been taken on so far. And I think it was something like 200 percent of GDP. It was very high. And the way that this is paid off is by expanding economic activity, not by denying people jobs and cutting their wages and decreasing the overall level of economic activity.

ALISON PENNINGTON: We pay off debt by expanding the pie. And this is this is the key difference between the period we’ve been living under of neoliberalism the last few decades. It’s been an era of forced scarcity. This idea, it’s basically a Hunger Games where people who are empowered tell everyone we don’t have the capacity to spend, you know, business, have to fight with unions. Unions have to cut the wages. Workers have to cut their wages for us to create the jobs and what governments don’t want us to know, and, of course, large sections of business is that we can actually expand public spending. The government and the public sector as a whole can undertake far, far more economic activity than it does. And that’s what the 40s reconstruction period showed us. It showed us debt did not get in the way. And we’ve had a reaction against the expansion of our welfare state and the public services of that era. It’s been a continual erosion of all of the space that we held as a collective where we could produce the things that people needed outside of the profit motive. And these are the battle lines. And the question of public debt is one of the clearest manifestations that that battle line is real and true.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And you talk there about expansion, but you’re also mentioning the imperatives of the ecological crisis. And in many ways, that notion of where the limits should be drawn, within which industry and markets might operate is another of the battle lines. What are the limits that we should be drawing for a sustainable society in the long run?

ALISON PENNINGTON: In terms of ecological limits, then obviously we need drastic investment into building our new renewable energy system and networks. We need to build that infrastructure in order to impose the limit on fossil fuels. And this is until we have that infrastructure, then there is no limit because they all just keep digging crap out of the ground and keep saying it’s the only way that we can produce the energy we need. I think some other if I was to expand this concept of limits, I would say one limit should be the relative space that private interests get to have in controlling economic activity, because if they control economic activity, they can try to control jobs and therefore they control the lives of people. So I think a limit should be as a collective on what, a discussion of what areas the private sector is best and able suited for operating in. I think then if we if we understand what sectors of the economy we would impose limits on private interests to run, we will we obviously we start talking about what things are essential to humanity and to a good life. Therefore, we want people who are delivering us essential services like health care and education and social services and all the stuff that’s essential to us. We want those people to be respected and in and to be high skilled and to be remunerated for that skill level. And what I think that the neoliberal system has shown us is that we can’t trust private interests to put the correct value on those skills. They write down the quality of services. The profit motive is corrosive on what it is that overall society needs and the limits we want to put on it, which, you know, I guess what I’m getting at is our limit is that we respect and value all human beings and their contributions.

ASSOCIATE PROFESSOR TAMSON PIETSCH: I wanted to end by asking both Megan and Alison what kind of universities they thought Australia needs in the 21st century.

MEGAN LILLY: I would say that the worst outcome would be a one size fits all across all universities. So we must have diversity in what our universities do. We need diversity, we need specialisation. And I think universities are going to need to look less like universities and just part of everyday economic and community life and fully embraced by, you know, all parts of our community and our economy. And I would also really hope for universities for the this century going forward is that they are absolutely deeply integrated and entwined with both the economy and community and that they are seen and owned by people, by our population, by our community, by our society in this sort of part of the beating heart of what happens all day, every day. And I think that that level of engagement, that level of ownership and that sort of ubiquitous nature, it would be a tremendous place for it to be. I think the role of the university going forward is going to be incredibly important, but it’s not singular.

ASSOCIATE PROFESSOR TAMSON PIETSCH: You said something which was very provocative, really. It was we need universities not to look like universities. So you think they won’t look like universities? What did you mean by that?

MEGAN LILLY: Oh, look, it’s just that universities can’t be sort of monolithic institutions that have got to be related to access points model. There’s multiple access points, but it’s not about people going to universities, about universities going out into the community, out into the workplaces and into society. So in a way, they should be everywhere. And just part of daily life, not necessarily looking for the big, big institutional structural piece notwithstanding, that will still be important. But, you know, it’s just a more deeply entwined, engaged relationship is what they need to look like.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And you don’t think they look like that now?

MEGAN LILLY: I think there’s more to go.

ASSOCIATE PROFESSOR TAMSON PIETSCH: And finally, Alison, given our discussion about the future of work, what sort of universities do you think Australia really needs in the 21st century?

ALISON PENNINGTON: I think we need the public university. That’s like the clearest place to start. It’s the only way we’re going to pull universities out of the mess they’re in is by injecting large amounts of public funding back into them. I think we want universities to be part of a national skills system that works with the vocational education sector. I think that there they have to be a system that coordinates that works for the public good. And I think that as the public attach conditions to our investment in them, part of that those conditions should be coordination and working with social partners across the skill system, across the labor market. All, quality university systems in other parts of the world have very strong social governance networks, which means that it’s not just the universities that actually run the skill system. It’s actually, you know, lots of other education institutions, but also workers who actually run the systems and coordinate things like advanced apprenticeships and internship programs like unions play a very strong role in delivering those. It’s about increasing the level of coordination, increasing the number of stakeholders in a conversation. And what that means is that the universities have to shift. Give up this privatisation experiment and the pandemic has sort of forced that upon them. But of course, there’ll be people who’ll be trying very hard to maintain what they have. But I think we are coming into an era where we can actually have a real reconstruction and reassessment of the entire post-secondary education system and remove these class divides between academic studies for more apt or able students and a VET sector for those who have fallen behind or something, I think we can create a world class post-secondary system that has many different pathways, support students and linking that vision into expansive economic policy and a job creating industry policy agenda. I think universities have to be really strong stakeholders in all of those processes. And for me, I just always come back to the only way that we can imagine them taking on those new incentives and that new role is if they are public institutions first and foremost.

ASSOCIATE PROFESSOR TAMSON PIETSCH: This podcast is about the relationship that universities have with governments on the one hand and publics on the other. And those publics include a whole range of groups, including employers. The world of work has long been a tie binding these three elements of the social contract together. And that is one thing that’s unlikely to change. But sometimes the future of work is described in terms that make certain kinds of changes sound inevitable. Digital disruption, for example, has been a buzzword for several years now. And although new technologies do have the capacity to reorganise existing systems, there is nothing inevitable about their effects or the uses to which they are put. These are the result of social and political decisions. The ways we imagine the future of work and the future of education with it depends on the kind of society we wish to build. What types of work, what types of jobs, and what types of education will help build a resilient society that will enable individuals and communities to thrive in the changing environmental and economic conditions that are coming. As COVID-19 transforms our higher education system, that is the question we should be asking.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Thanks to my guests for giving their time and sharing their thoughts. Megan Lilly, Head of Workforce Development at the Australian Industry Group, and Alison Pennington, Senior Economist with the Centre for Future Work at the Australia Institute.

ASSOCIATE PROFESSOR TAMSON PIETSCH: Next time on The New Social Contract, we look at universities and their communities. What is the relationship between universities and society?

ASSOCIATE PROFESSOR TAMSON PIETSCH: We’ve been talking a lot so far on this podcast about the relationship between universities and government. But what about the various communities universities serve? What should they be demanding?

MATTHEW COX: I think inviting people in from the community, from industry, from government, from partners into a relationship, letting that relationship grow over some years. It starts to do its own work is my message. So sta by opening up, start by exploring and then let the consequences of what evolves guide what you do.

ASSOCIATE PROFESSOR TAMSON PIETSCH: To continue the conversation we’re having here, head over to Twitter. You can find us @TNSCpod or send us an email at impactstudios@uts.edu.au

There is also a linked article in The Conversation by myself and Leesa Wheelahan that you might like to check out.

I’m Tamson Pietsch and thanks for listening to The New Social Contract.

FEMALE VOICE OVER: The news grabs and additional sounds in this episode on The New Social Contract podcast came from the following places. ‘From back in black to Recession’ reported on AM ABC. ‘The recession we couldn’t avoid’ on RN Breakfast with Fran Kelly, ABC. ‘Treasurer Josh Frydenberg says Australia has officially entered recession’ from ABC News. ‘Treasurer warns the worst is yet to come as Australia’s economy enters recession’ From ABC News. ‘The Paris riots of 1968: French students again clashed with riot police’ Paris, France, published by British Pathé on YouTube. ‘The May 1968 protests that paralyzed France’ published on Witness by BBC and ‘May 1968 Paris Riots’ on the History Hour published by the BBC.

MALE VOICE OVER: The New Social Contract is a podcast series made by Impact Studios at the University of Technology, Sydney. The production team live on the lands of the Gadigal people of the Eora Nation, whose lands were never ceded.