Liberal labour markets at the crossroads: the cases of Australia and New Zealand

This chapter analyses the evolution of labour markets and labour market policies in Australia and New Zealand. The traditional Antipodean ‘wage earners’ welfare state’ was based on a combination of trade protection and living wages for breadwinner families. The chapter shows that while protectionist measures were swept away in both countries in the 1980s and 1990s elements of the living wage model remain in place, though the model is increasingly challenged by the existence of a guest worker underclass and considerable underemployment, especially in Australia. The chapter argues that the ‘post-protectionist’ labour market policies of Australia and New Zealand have shown clear signs of politically-mediated divergence in recent years, with New Zealand governments pursuing less aggressive activation policies, focusing more on lifting wage-earner living standards and pursuing more successful female labour mobilisation and gender equalisation policies.