Divide and Conquer in Australia: A Study of Labor Segmentation

Abstract

This study uses a sample of 982 Australian workplaces to ascertain whether labor segmentation affects the Australian economy. Cluster analysis allocates private-sector workplaces among the primary independent, primary subordinate and secondary segments. I then test whether segment location predicts other facets of the workplace, and whether the two primary segments significantly diverge. The majority of such tests overwhelmingly support the argument that the hypothesized segments exist and help explain the functioning of workplaces. The evidence also suggests that various divide-and-conquer strategies are often applied by Australian firms to reduce worker solidarity and that conditions for employees in the primary segments have recently deteriorated while innovative employee relations techniques have simultaneously emerged. (JEL nos. J41, J42, J50)