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So… just why do we need IR reform again?

If you relied on the national newspapers alone for your view of the important issues facing the Australian economy - and there are, presumably, some people out there who subject themselves to such a benighted state — you’d be convinced that industrial relations reform was critical to our economic future.

The biggest tub-thumper is the Financial Review, which most weeks will run several op-eds and straight news pieces about the need for either limited reform or a comprehensive overhaul of IR laws. It’s probably unnecessary to add that the sort of reform urged by the Plutocrats’ Gazette isn’t the sort the CFMEU is calling for.

This is in tune with the desire for further IR reform that lurks in many Coalition hearts, although currently only a few, like Steve Ciobo, are brave enough to put their names to calls for the Coalition to abandon its election commitment to not touch IR for three years.

A common theme through all these demands for more IR reform is that they’re long on assertion but very short on evidence. The best example was the Fin’s editorial on 28 September, entitled “Bracing tonic for the economy”, about Treasury’s advice to the Government. On Treasury’s list of reform priorities, the Fin declares without context or justification “it ought to have included labour market flexibility as a goal but probably considered this futile in the face of bipartisan resistance to further change.”

Which is an odd conclusion to reach given Treasury clearly didn’t have that misgiving about telling both parties their Little Australia policies were nonsense, but anyway. More of Treasury’s views in a moment.

And just on a technical note, when IR reform advocates talk of “flexibility”, understand that they’re using shorthand for “flexibility to lower wages and conditions.”

But time and again, the need for IR reform is urged, without any supporting argument. There’s a signal lack of evidence to back up such consistent demands for reform. Typical was a Fin piece on 21 September, “Jobs law favours workers, say bosses” (I’d pay good money for a headline “Jobs law favours bosses, say bosses”).

A small business lobby group SME Boardroom had produced a survey purporting to show that unfair dismissal laws were “limiting the growth” of small businesses. On 8 October, an article by Mark Skulley quoted slabs from the annual reports of mining companies about how the Fair Work Act could “hurt workplace flexibility and productivity and push up costs”

And the evidence provided to back the claims? Well, none.

Worse is when the evidence directly contradicts the assertions of reform advocates. “Private wage growth is beginning to stir,” said David Bassanese last week in a piece calling for a mini-budget to slash government spending. Private wage growth is doing nothing of the sort. The ABS’s labour price index released in August showed private sector wage growth at 0.7% for the June quarter, the same as it had been in the March quarter, and the December 2009 quarter, lower than the 0.8% recorded in the March 2009 quarter, and certainly lower than the 1% quarterly increases seen prior to the GFC.

Indeed, the fact that private wage growth never topped 4% annual growth even at the height of the full employment produced by the pre-GFC resources boom is, compared to our record in previous mining booms, remarkable. It’s a key reason why, as ACTU president Ged Kearney points out, the wages share of national income is at historic lows.

You could attribute that wage growth restraint to Workchoices, except that wages growth wasn’t high before March 2006 either. The introduction of Workchoices was never justified by out-of-control wages growth.

So if wages (apart from executive remuneration) aren’t growing quickly, what are the other reasons why we need to impose greater “flexibility” on Australian workers? Let’s take three reasons: SME Boardroom’s suggestion that jobs growth is being curbed by unfair dismissal provisions, levels of industrial disputation, and Australia’s flagging labour productivity performance.

On the face of it, the idea that Labor’s IR system is crimping jobs growth is hard to sustain, given how strongly employment has powered out of the GFC. In September last year, Malcolm Turnbull said that Labor’s system would “be judged on its performance in the workplace”.

Surging employment growth, at nearly 50,000 jobs in September this year, appears to suggest it has performed well; indeed, had it performed much better, we’d have been in line for higher interest rates sooner than November.

The contrast, as more than a few commentators have noted, with the United States and its highly-deregulated labour market is fairly stark. But what about small business specifically? Over the August quarter, ABS data shows, traditional small business sectors like retail and rental, hiring and real estate were among the biggest hirers, along with mining, while sectors like manufacturing and financial services went backwards.

What about levels of industrial disputation? Is the return to low unemployment driving fractious unions to aggressively pursue big pay rises? The ABS’s data on working days lost per 1000 employees showed a fall in the June quarter, the second consecutive fall, to the lowest level since the depths of the GFC.

In fact let’s provide some context for levels of industrial disputation, using ABS data. Over the long-term, the Keating Government oversaw a step-change in industrial disputation, one gradually built on by the Howard Government. Australia is now at levels of industrial disputation that would have seemed fanciful in the 1980s.

Industrial disputation

A different data set from The Economist shows in 2009 Australia was little different from the US in terms of industrial disputation in 2009.

So there’s no basis for further reform according to levels of disputation.

What about productivity, which has plateaued and even started to fall in recent years? Treasury’s incoming briefing for the Government identified participation and education as priorities for improving productivity and addressing the problem of an ageing population.

But contra the Fin, Treasury did mention “flexibility”. “A close watch will also need to be kept on the labour market: while the evidence to date is that the labour market continues to be flexible, it will be important to guard against any developments that might put flexibility at risk.” And it said the same thing to Coalition.

So what’s the case for IR reform? Why is it a priority? What is the specific problem that needs to be addressed? We’re facing a reform drought from a generation of risk-averse, opportunistic politicians who lack the policy mettle of the Hawke-Keating-Howard-Costello generation.

Major economic problems like climate change, housing supply, water and infrastructure provision are going begging for solutions. But business and sympathetic commentators want the focus to be on IR “flexibility”.

It’s hard to avoid the impression the only real agenda is for corporate Australia to keep a tight lock on the share of national income going to its employees, which has been screwed down and screwed down to boost shareholder dividends and executive remuneration. There’s no case for major reform apparent from the data. If there is, let’s see some hard evidence from its advocates in business and the national papers.

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  • 1
    sickofitall
    Posted Monday, 18 October 2010 at 1:41 pm | Permalink

    It’s all about making sure the ‘trickle-up’ effect (for that is how money works - anyone who says otherwise is an idiot) stops trickling and starts gushing up. I hate f*cking economists: the only less educated people in this country are the Anglican Clergy from Moore College in Sydney. My Arts degree (in History and Politics) was about 10% economics, which covered 100% of economic thinking. Anything I missed was just overpaid, undereducated bullies (of all political stripes) tinkering…

  • 2
    John Bennetts
    Posted Monday, 18 October 2010 at 1:55 pm | Permalink

    Next article: A shareholder’s action plan to improve CEO “flexibility”?

    Targets:
    1. Move a few on. Outlaw poison pills of any name or shape. If they are that good, another job will come up… won’t it? And we don’t need redundancy pay or severance deals, do we? They work against flexibility in a big way. What you are paid is what you get.
    2. Pay a what they are worth instead of what they want.
    3. Open up board rooms to female directorships - say from 8% to 40% min. I’d like to see a mandatory gender split in the range 40-60 for each gender.
    3A. Do something about the “Directors’ Club”. Don’t know what, don’t care. How about a culling and re-stocking? Our boards need new blood, almost all of them.
    3B. Publishing minutes of Board meetings. Sacrilege! If Treasury can do it, so can corporates.
    4. Outlaw poison pill corporate ownership deals. Rupert, are you listening?
    5. Democratise (wrong term) AGM’s.
    6. Remove the right of Boards to appoint new Directors between AGM’s. S. Mayne would have
    an idea or two here.

  • 3
    Jimmy
    Posted Monday, 18 October 2010 at 2:14 pm | Permalink

    Int the past 15 years we have had solid economic growth a short down turn and now a return to solid growth. At no stage have we had a wages break out despite hovering close to full employment for extended periods and duiring the downturn the labour market was able to easily adapt to less full time but more part time employment to minimise job losses. this to me sounds like a well functioning IR system.

  • 4
    GocomSys
    Posted Monday, 18 October 2010 at 3:15 pm | Permalink

    Bernard,
    (Major economic problems like climate change, housing supply, water and infrastructure provision are going begging for solutions. But business and sympathetic commentators want the focus to be on IR “flexibility”).
    Of course there are many viable solutions available. Unfortunately, in the current environment, many positive attempts to solve these problems are being sabotaged already in the initial stages. The usual suspects, for a variety of opportunistic reasons are scuttling these processes. Diverting the “focus” onto other issues is just one of many ways to do it. A “focus” on solving priority issues in the national interest just isn’t part of their short term strategy!
    It is high time to “out” these culprits!

  • 5
    the man on the clapham omnibus
    Posted Monday, 18 October 2010 at 3:21 pm | Permalink

    The biggest threat (and need for reform) in my opinion probably on the productivity & skills front.

    Big business is not willing to pay the bill for this, they run a ‘beggar thy neighbour’ scam by poaching trained & skilled employees from overseas, the public service and when that fails smaller companies.

    With visa based migration, wages are opened to more competition, schools become more crowded, demands on healthcare increase, service costs rise, and incentives to train native workers fall. Not all jobs recruited for are high earning where income taxation would cover some of these costs.

    Effectively this discourages investment in local skills, training and ignores the cost of extra infrastructure required for an increased migrant population. European politics is aflame at the moment with these types of issues where a lack of integration of immigrant communities has created social problems where traditional working class areas are forced to cram more people in. Business has reaped the benefit of the lower wages, a more ‘compliant’ workforce and reduced training costs but avoided the externalities created.

    Irwin Stezler had a thought provoking article in the Age on the weekend that businesses should bid for overseas visa workers to cover the externalities rather than automatically going via the skilled visa route.

    This would help ensure that hiring was more about actual skills shortages than just another tool to drive down wages and avoid training costs.

  • 6
    Jimmy
    Posted Monday, 18 October 2010 at 5:01 pm | Permalink

    Where is the censor to stop people posting links to erection problem ads? as above!!

  • 7
    freecountry
    Posted Monday, 18 October 2010 at 5:07 pm | Permalink

    Bernard Keane,

    And just on a technical note, when IR reform advocates talk of “flexibility”, understand that they’re using shorthand for “flexibility to lower wages and conditions.”

    Well of course. But that, too, is flexibility to increase employment, and whatever you say about low unemployment, it’s nowhere near capacity. Roy Morgan estimates combined unemployment and underemployment at 13.1 per cent, that’s 1.5 million people.

    Higher employment means higher productivity, labour becomes harder to find, wages rise by natural means. This isn’t just “theory,” it was demonstrated spectacularly by the outcomes of the Hawke-Keating microeconomic reforms.

    It’s also flexibility for minimum award wages to be set at the state level, as they should be, because the cost of living is vastly different from state to state. And flexibility for jobs to be created in regional Australia, where the cost of living and especially land is far cheaper than in the pressure-cookers of the capital cities.

    Sickofitall:

    It’s all about making sure the ‘trickle-up’ effect (for that is how money works - anyone who says otherwise is an idiot) stops trickling and starts gushing up.

    Actually you’re right in one respect: there is no such thing as a “trickle-down effect”. Real wealth (as opposed to fiat money) does not “trickle”; it springs into existence from thin air, whenever two parties enter into a mutually advantageous trade for something (like labour or an i-pad) that’s worth more to the buyer than it is to the seller. It’s that newly created wealth that economists call “growth,” and historically that is what has led to real wage increases in Australia.

    Julia Gillard claims to be the carrier of the Hawke-Keating torch. The brilliance of their 1980s Prices and Wages Accord was that for the first time it linked wage increases to inflation — in other words, it introduced flexibility to industrial relations for the first time. It wasn’t perfect, but it was a massive start. If Hawke were in government today, what would he say about flexibility?

  • 8
    Tom Mullin
    Posted Monday, 18 October 2010 at 6:01 pm | Permalink

    Just our ‘corporate elite’ salivating at the thought of duplicating the US. 30 years of no real growth in workers wages, 10 years of zero income growth in the middle class.

    Whoopie, gobs more money for the CEO’s, speculators and the like. More quietly, gobs more money for political parties and retirement jobs for politicians.

    Gosh, how dare we have lower income inequality than the US.

    For the simple: lower wages for ‘little people’ = higher pay for CEOs’ (and their hangers on). The fact that this destroys a consumer based economy seems to be beyond them (though they all pin their hopes on more immigration). Yep, they are all sillier than Henry Ford.

  • 9
    Liz45
    Posted Monday, 18 October 2010 at 6:03 pm | Permalink

    Funny how the proponents of reducing other peoples’ incomes never include their own? It’s as though those on low incomes have a ‘special place’ to buy their essentials, and therefore, low incomes are OK for the rest of us. The arrogance of so-called economists and politicians is breathtaking. I recall the article written by a well known economist about pensioners demanding a decent income, as opposed to those on a single pension or benefit living in poverty. I’m sure his income was in the six figure category?Also, equal pay for women has gone backwards, thanks to Howard. Some women have to work an extra 65 days per year to earn the same as their male counterparts. It wasn’t that long ago, when male teachers in NSW received a higher income than their female colleagues, who undertook the same training and worked at the same school? Equal pay for those women took 5 yrs of constant fight and argument?

  • 10
    ronin8317
    Posted Monday, 18 October 2010 at 6:10 pm | Permalink

    Unfair dismissal laws had been rorted extensively by lawyers before Work Choice. The NSW workplace safety law is also pretty stupid : it uses the ‘French’ style law with a presumption of guilt.

    Beyond that, the IR reform Australia really needs is for CEO to be fired by their directors with only 4 week termination pay, outlaw severance packages, and remove the ability of former execs to sue their previous employer. What’s good enough for the workers should be good enough for the managers as well.

  • 11
    Bernard Keane
    Posted Monday, 18 October 2010 at 7:14 pm | Permalink

    Thanks Jimmy, I’ve deleted that comment. B

  • 12
    the man on the clapham omnibus
    Posted Monday, 18 October 2010 at 7:47 pm | Permalink

    Maybe if flexibility was a 2 way street workers may be more open to it?

    For all the promise of work-life balance arrangements and flexible hours most employers are big on talk and small on action in accommodating family life and commitments, providing even base CPI wage increases and quickly revert to command and control management.

    As far as wages & employment go, according to the Salvation Army today, two million Australians are now living in poverty. (One in 10 ~ 10%)

    Hardly seems like we have a problem with exploding wage bills at the low end or even close to a full employment capacity.

    How many unfair dismissal cases that are raised are ‘nuisance’ claims vs. genuine grievances?

    I understand that there are both fraudulent bosses and recalcitrant employees in our system but with unions losing their influence I think the regulation we currently have is probably the line in the sand we need.

  • 13
    Julius
    Posted Monday, 18 October 2010 at 10:34 pm | Permalink

    @FreeCountry

    While I am in sympathy with your argument in general, not least in your emphasis on the reality of gross underemployment and unemployment, by no means overstated by Roy Morgan (and it doesn’t include those on disability and other pensions who could be working) I am not so sure about your statement that “Higher employment means higher productivity”. In fact one of the explanations for some of the apparent slow down in productivity gains during the last half of the Howard-Costello years was that less efficient labour had to be employed because unemployment rates were coming down.

    It has been argued that Singapore used deliberate upwards pressure on wages as a way of shifting its economy into more high skilled higher value added areas but, even where a case can be made for that it is unlikely that, in Australia, it would be as important as subsidising those who trained to upgrade their skills or who were being trained by employers to upgrade their skills. Not that I would suggest that there are any blanket solutions. The time it takes to train someone up to the needed standard matters if you are trying to produce something while demand and prices for it are high and it is no use pretending that people are anything like equal, even at a given age, in their potential to be able to do highly skilled work however much money is poured into training. Would you rather employ a fourth generation Aussie who left school at 15 with not much education or a recently arrived Indian or Chinese university student who was working hard to master English - for almost any job you can think of?

    @Liz45
    “Funny how the proponents of reducing other peoples’ incomes never include their own”
    A pity you don’t know more fair minded decent people. And a pity that you don’t describe the situation fairly. The point is whether people are consistent in the principles they say should be applied and, where applicable, try to apply. True, that even when your recognise how many basically decent people are trying to be intellectual honest and consistent it is always worth inviting them to consider carefully and sincerely how they may be unconsciously favouring their own interests, most likely out of a degree of lack of imagination and some ignorance of the facts of others’ lives.

    In general, though I am very critical of the lack of intelligence (and maybe worse) displayed for many years in the design of remuneration packages (a very serious matter for all of us when Wall Street excesses are included) I suggest that it ought to be recognised that motivating people with money has become harder since the welfare state pretty well guaranteed that no one should starve or lack basic medical care and even leisure activities became the general expectation of almost everyone. The very argument for progressive taxation, namely that the extra $1 counts for a lot less for a rich person than for a poor one has the logical consequence that you can’t motivate a rich person with money unless you are willing to pay him an awful lot more. If, at the same time, you have a greater percentage of the population equipped to enjoy a life of the mind, or as artists - or art lovers - who may not earn much, you are going to have even fewer smart people competing for the top paying jobs so more must be paid to get the best business leaders. Believe what you like, according to your prejudices, but the logic is inexorable.

  • 14
    Julius
    Posted Monday, 18 October 2010 at 11:09 pm | Permalink

    @ BERNARD KEANE

    I msy have no more experience than you of working in small groups like a small business where there is a lot less scope for dealing with the problem of square pegs in round holes than in very large organisations but I think we might agree on the pertinence of something I heard on “Background Briefing” on Sunday 17th October. Speaking at the Commowealth Club of California on the Business of Bosses Stanford Professor of Management Ross(?) Sutton said, inter alia, that the significance of the toxic employee was that one bad thing said or done needed five good ones to make up for it. He rather nicely made the point by relating it to martial relations where no doubt many would agree that the point was well made.

    To me it trebled my understanding of the complaints of small business people about dealing with seriously unsatisfactory employees. The psychopathic boss can be escaped with little complication even if some monetary loss and retarding of career but the psychopathic employee, though just one small cog in the small businessman’s workplace can cause a disproportionate diversion of effort and management time.

  • 15
    Liz45
    Posted Monday, 18 October 2010 at 11:47 pm | Permalink

    @JULIUS - Take our politicians for example. Remember Abott whining when Labor won in ‘07? He was going to have to survive on a backbencher’s salary, while he’d been part of a govt that argued against almost every wage increase for those on the lowest incomes.

    Then there’s the politicians in France, Spain and Britain and others - making the ordinary people pay for the greed of the corporate wealth who caused the problems(GFC) in the first place. The US govt gave trillions in handouts to the big end of town, at taxpayers expense, including unemployment and loss of homes. What sort of madness allows millions to be homeless, while the houses they were forced to leave are vacant, and get battered and vandalised ? Very intelligent indeed! What part of these scenarios have I misrepresented?

    I haven’t heard any of the so-called leaders advocate a cut in their incomes, have you? If so, I’ll be the first to apologise. It’s worth mentioning also, that before Howard & Co. lost the election, he and Costello changed the tax laws and super laws that resulted in increasing their parliamentary pensions? by $2 million between them? Nice little perk that was, and of course, they’re not the only ones to benefit, but they’re the ones who spring to mind who were absolute hypocrites - with our money!

  • 16
    Julius
    Posted Tuesday, 19 October 2010 at 1:16 am | Permalink

    @Liz45
    “I haven’t heard any of the so-called leaders advocate a cut in their incomes, have you? If so, I’ll be the first to apologise. “
    You’ll easily find the details if you Google for them but, simply put, Cameron, Clegg and their colleagues in the UK have taken quite big cuts in their pay.

    There were a number of good things about Costello’s last simplification of the superannuation tax system but also some unjustified giveaways that related to far more than their own situations. By contrast, when the Kennett government in 1992-93 was taking drastic steps to restore Victoria’s finances after the Cain-Kirner disaster (as in California and New York in recent years, very much the product of public sector union influence) MPs cut their own superannuation as part of the package. Unfortunately for those who retired in 1996 they weren’t included in the restoration (with extras) of what had been given away when a former Labor Treasurer and a senior National Party figure agreed on a deal, sold it to the Premier and effectively bypassed the Minister for Finance to push the reward for the past restraint through the Parliament late at night. Ultimately it could be regarded as a step in bringing down Kennett’s government though it was an all party exercise in greed.

    It has since got worse as the Brumby government has given totally phony reasons for allowing spouses and domestic partners of both sexes to receive the full pension rights of a traditional spouse beneficiary who would have helped the MPs career (and, if female, brought up the children) over many years. That means that a retired Premier who was divorced or widowed could take on a young carer as domestic partner so that an indexed pension of as much as $100,000 a year (now) might have to be paid for 40, 50 or even 60 years. Have you heard a peep about the cost of that?

  • 17
    Harvey Tarvydas
    Posted Tuesday, 19 October 2010 at 3:23 am | Permalink

    Dr Harvey M Tarvydas

    BK once again giving an articulate, comprehensive, researched, evidenced, concise discussion or enlightenment on a seriously important national economic subject rather than pandering to a partisan opinion to the favoured group. Some medicine for our sophisticated society’s intellectual malady – brain rot by toxic pandering media.

  • 18
    Harvey Tarvydas
    Posted Tuesday, 19 October 2010 at 3:35 am | Permalink

    Dr Harvey M Tarvydas

    The right public education, to which BK contributes admirably, makes the pollie whom depends on taking the common mans ignorance for granted a loser.
    Keep it up BK.

  • 19
    freecountry
    Posted Tuesday, 19 October 2010 at 9:06 am | Permalink

    Julius,

    Minimum wages

    What you say about using upward wage pressure to raise skill and efficiency levels is interesting. I wasn’t aware of that consideration. I did not, by the way, object to minimum wages, as long as they are set at state not federal levels. Also Hawke’s indexing of wage rises to inflation was ingenious, a world first I believe, which would have sent Keynes back to the drawing board if he had seen it. Several other arguments can be put forward for minimum wages, including the collective costs of poverty and related crime, and the consumption demand generated by mass disposable income.

    Education

    But as you say, there are other ways to do so. Education is considered one of the longest-term investments a state can make in its long term future. Unfortunately the last 25 years of education reforms have produced some great specialists and a lot of educated idiots. Tech certificates are padded out into three year bachelor degrees, teaching one year of skills and two years of “professional studies” navel gazing. All those who wear black shoes to work now call themselves “professionals” without even knowing what the word means. In an era of unprecedented dynamism in the labour market, it takes a person years to retrain for a career change which once would have taken months and involved the same level of actual knowledge.

    Universities started off being investments in our future. Then they were nexuses of international networking as young Australians mixed with tomorrow’s Asian elite. Then the second generation rich brats of Asia started objecting to exam results, and we made the fatal mistake of dumbing down academic standards to accommodate them, causing the real Asian elite to go elsewhere for proper education. Then Australian degrees became simply a mass market for paper qualifications, which was no longer competitive as its reputation dropped, so we had to add back-door immigration as an enticement (a form of protectionism, but non-cash so there were no raised eyebrows at GATT). Australian education today is a joke; successive federal governments have broken it.

    Elite remuneration

    As far as remuneration for elected officials and company directors — people who set their own rate of pay — I’d like to see people free to name their price when they stand for election, and then it remains fixed until their next election. Simple, transparent, democratic, accountable, flexible.

    The arts

    You may see the arts as a diversion of potentially more productive minds. But you also said, “motivating people with money has become harder since the welfare state pretty well guaranteed that no one should starve or lack basic medical care and even leisure activities became the general expectation of almost everyone.” Money is no good if you run out of things to buy with it — like Soviet Muscovites flush with cash walking through empty shops, or Australians looking for a good night out and not a single decent piece of live music on offer. The arts, the finer things, make money worth something, which would otherwise just be meaningless pieces of paper with numbers on them. It may take 100 dropouts strumming away out of tune in their dad’s garage to develop just one talent who’s really worth listening to. Which may make it worth our while to support the other 99 on welfare.

  • 20
    SBH
    Posted Tuesday, 19 October 2010 at 10:17 am | Permalink

    Freecountry, I know that the theory predicts that the flexibility works both ways but in my practical experience of over 25 years in industrial relations the flexibility is used by the party in the relationship with the most power to his advantage.

    So small business reduces hours, shifts, pay and conditions swiftly when things get tight often as a first response and increases them slowly when things improve often as a last resort. The analysis (like Peetz and Buchanan) of the experience of workers during work choices bears this out.

    Workers with little bargaining power, especially women, casual workers, people in retail and hospitality did very poorly out of that flexibility.

    But to the point, there’s no evidence that business big or small in Australia is being crippled or even significantly impeded by the current fairly low level of regulation. This is a call to plutocrats and kleptocrats for them to increase their share of the pie. That increase will come out of workers pockets.

  • 21
    Dogs breakfast
    Posted Tuesday, 19 October 2010 at 10:18 am | Permalink

    Higher employment means higher productivity, labour becomes harder to find, wages rise by natural means. This isn’t just “theory,” it was demonstrated spectacularly by the outcomes of the Hawke-Keating microeconomic reforms.”

    Free country, as pointed out by others, higher employment will tend towards lower productivity. Always. It can be taken as fact that the last people employed are the least skilled, and the least skilled are generally the least productive, ergo, reduced productivity with higher employment.

    As for “Labour becomes harder to find wages rise etc” - The Labor/Unions Accord was all about keeping wages in check, and during a time of higher productivity rises than just about any other time. Wage rises under Hawke/Keating were lower than at other times, and particularly when productivity is factored in.

    Bernard is right, there is no need for IR reform, and that is from someone with 30 years experience in HR. The only area of contention is unfair dismissal provisions for small (really small) business, probably around the 25 employees

    The biggest impediment to IR progress is the disconnect between the outrageous and unjustifiable remuneration leaps for the executive class while at the same time expecting wage moderation from the people who actually do the work. The gret leaps in remuneration have not led to better management, and a reasonable case can be made to say that management is now much less effective partly due to the exorbitant remuneration. But let’s not get lost in facts here, there’s some ideological shibboleths to peddle.

  • 22
    freecountry
    Posted Tuesday, 19 October 2010 at 11:21 am | Permalink

    I did say “the outcomes of the Hawke-Keating microeconomic reforms.” I didn’t say the relationship was instantaneous.

  • 23
    freecountry
    Posted Tuesday, 19 October 2010 at 1:27 pm | Permalink

    SBH,

    Doesn’t your argument depend on a false dichotomy? Either a Howard-Abbott style regime with laws favouring the employer sector; or a traditional Labor regime with laws favouring the unions.

    These things work best with a balance of power between unions and employers. Howard never should have loaded the dice against unions or made it a potential crime to go on strike; that was just as bad as Labor predecessors writing union monopolies and union policies into the law.

    If unions were not encouraged to spend so much time lobbying governments to enforce their monopolies, they would have started developing less coercive means of controlling the labour supply, by developing their own training institutions, competency benchmarks, and standards of conduct. In other words, they would have evolved into something like the professional associations, the AMA and so on.

    Their best defence against being undercut by “scab labour” would then be worker accreditation assuring a minimum quality of labour supply, rather than monopolies, picket lines, and violence.

  • 24
    SBH
    Posted Tuesday, 19 October 2010 at 3:03 pm | Permalink

    FC by the paras

    1) No - for much of Australia’s history strikes were technically illegal and industrial disputes were resolved on the merits of the case by an independent body. this was a bi-patrisan approach that worked for 90 years. despite perjorative characterisations of it as ‘a club’ , our concilliation and arbitration system was a jewel of Australian governance and greatly reduced the effect of fluctuations of power between labour and capital. Now it could be argued that centralised wage setting could not survive into the modern world but to do away with the rest of the edifice was a serious mistake.

    2) What Howard did was an abuse of human rights. It was also a grave political mistake but that’s in the past. Can you develop the concept of union monopolies? If you mean exclusive coverage and the ‘conveniently belong’ convention that does have some benefits (albiet not unalloyed) in that a building employer gets to deal with 2 or 3 unions rather than 30. This is a good thing. If you mean super funds, industry (union) funds developed under Hawke/Keating perform much much better than Costello’s private retail funds.

    3) Firstly the AMA is the most exclusive and belicose of unions. Keating once said of them that the only time they listened was when you had one foot on their throat and the other kicking their privates. They enforce their monopoly viciously and lobby government with the threat of withdrawing health care from public patients.

    But to your point. I think the old system worked well and could probably work today had it not been dismantled. The price for that level of order was some restrictions on individuals ability to participate but I think that was an insignificant when weighed against the benefits. As for current days, union power is largely illusory and modern Australian unions continue to try to deal with the changes in the workforce (well except the SDA which just sells its members conditions for exclusive deals with the boss).

    4) accreditation is a sound idea which is not well exploited but some unions have used it to good effect. Union violence is vastly overstated and occurences are rare.

  • 25
    freecountry
    Posted Tuesday, 19 October 2010 at 6:50 pm | Permalink

    Moderator, please delete my last. I’ll reprint it verbatim, truncating the last line and its taboo word, and adding a bit at the end.

    SBH,

    (1) Unions have contributed a great deal of benefit to Australian quality of life and safety at work. But at the same time, for much of Australia’s history, unions have been able to exclude non-members from certain types of jobs, effectively threatening workers with unemployment if they did not follow directives such as striking, limiting their work hours, or in some cases limiting their productivity (eg the wide comb shearer strikes). By picketing they have been able to threaten businesses with closure, and to threaten the whole community with loss of services such as transport.

    (2) But the biggest losers have been workers in industries not lucky enough to have strong unions. It can be shown mathematically that there is no way to increase total wages above the total level of demand for labour, for very long. Artificially high wages either shrink the workforce, accelerate inflation, or transfer money away from workers not belonging to strong unions. For every strongly unionized industry—and some of them such as the MWU are traditionally a hereditary closed shop—there has to be a weak one, from which wages are skimmed off to transfer to the privileged club.

    No, I’m not talking about superannuation funds. Union funds were an inspired idea, which for the first time gave union leaders and fund members a gallery seat at the capital markets on which their wages depend. Leaving aside the ingenious economics, the psychological effect alone has probably done more to tame union extortionism than anything Howard ever dreamed of.

    (3) The AMA has earned the right to be a pain, because it regulates professional standards of conduct and education in a way that a non-expert agency like Parliament could not possibly do. Doctors who abuse their patients or bring the profession into disrepute are first judged by a tribunal of their peers, whether or not any criminal charges are laid, facing potential deregistration and loss of the right to practice medicine. The same could not really be said of architecture associations, or of the pilots’ association which did such a good job of bringing the 1980s tourist boom to an end.

    You say “union power is largely illusory”. Tell that to Simon Crean, Maurice Iemma, Nathan Rees, and Kevin Rudd. Today unions exert power not so much by picketing workplaces as through control of government through the ALP, particularly in Vic and NSW. And control of the ALP in NSW means control of federal parliament.

    By “violence” I include implicit threats of violence. A picket line may look nice and civilized, the wife and kids coming along to sing songs and not a baseball bat in sight. But it’s still a threat to anyone foolish enough to try crossing it. In much the same way that a court warrant for a tax hearing may look civilized but is potentially backed by handcuffs, guns and imprisonment.

    Bernard Keane notes that Work Choices did not increase aggregate wages. Refer to my point above that industrial action does not raise aggregate wages either. There are two, and only two, ways to gain wealth. The first is productivity increases (including better skills, more trade, efficiency gains from competition, more efficient taxation, new industries, reduced wastage, etc). And the second is transferring wealth from one group to another (includes extortion, crime, gambling, land speculation, concert ticket speculation, and squeezing up wharfies’ wages such that the extra money comes not out of management but out of the wages of other industries).

    So what’s the point of wage flexibility? Chiefly it enables a better worker to negotiate a higher wage than an oxygen thief, and it allows jobs to redistribute geographically in a more efficient way, yielding gradual gains which eventually are reflected in higher productivity and higher aggregate wages. That’s not to say minimum wages are necessarily bad, in exactly the same way that some degree of tax-funded welfare is good for society. But union supporters should be under no illusions that minimum wages are anything other than a transfer of money from workers with less power to workers with more power. It has no direct effect on aggregate wages.

  • 26
    SBH
    Posted Tuesday, 19 October 2010 at 9:41 pm | Permalink

    FC I’m fascinated by what the bad word could be.

    No I don’t accept the argument about latent violence being the same as actual violence. And doctors are judge by a range of state run boards. The professional groups don’t have the power to register or deregister a doctor.

    The closed shop hasn’t existed for a very long time and it was never universal. For much of Australia’s history it has been illegal. As for picketing or withdrawal of labour, yes it’s true that that can threaten a business but so a boss can threaten an individual worker with the sack. Can’t argue with point two as I don’t know the maths but union extortionism? hmm? I will say that union activism (as you - to a point - concede) has given us a 38 hour week, four weeks annual leave, maternity and paternity leave, workplace safety laws and so on. One of the things that the boss repeatedly fails to grasp is that the money is not the most important thing to workers.

    The AMA has a right to protect its members and to agitate energetically for better conditions and it does so in the same old way all unions due. It’s professional role is merely a restriction of labour that few would accept in other jobs. Of course doctors are special.

    As for union power, I talk as an insider. Yes they have power but they don’t control the ALP any more than Canute controlled the tide. No that’s not true but the power of unions within the ALP is a more complex thing than suggested.

    As for flexibility I’m unaware of any practice or law that stops a good worker earning more than a poor one. It may take time but employers reward good workers with more responsibility, higher pay etc. The flexibility sought by groups like the mining industry is flexibility to drive wages down and hours up.

  • 27
    sickofitall
    Posted Tuesday, 19 October 2010 at 9:46 pm | Permalink

    @Freecountry: money doesn’t appear - it just is. So, when you buy labour or an iPad, you give money from an already existing pool in exchange.Money transfers from you to the vendor. This is all ok: I agree with you that there is no trickle down effect (obviously! I said it first - sort of…) Now, value (a much misunderstood concept, IMHO) determines whether you felt your ‘impoverishing’ (too strong a word, but I hope you get what I mean) was worth the purchase you made.

    Money is a finite amount, controlled by the Reserve Bank - if more money gets printed, it loses value (though that’s not the only way by far money loses value: inflation, world trading, et cetera). I would argue that money tends to go towards the rich: it’s not just oppression of the poor (though Marx was right there), but that the rich own most of the means of trade. Money circulates. You hire a plumber - he’s not necessarily rich (and I’ll take for the point of argument you aren’t either (though I’m sure you do ok!). You pay him for his service. He buys his equipment from the local hardware shop. They buy their equipment from a multinational… (and that’s necessarily reductive - I’ve ignored wages, insurance, maintenance, petrol, et cetera, all of which eventually moves up to an elite.)

    It’s why the Australian stimulus worked and the US stimulus failed: ours started with lower wage earners. We paid off credit cards, and/or bought luxury goods, or even saved it (when you save it, of course, the bank or financial institution gets a profit through loaning it out, or investing it again, or just using it to pay its employees. In the states, the pockets of senior executives were lined. The only real criticism I heard of the Australian stimulus was from King Bogan Gerry Harvey who lamented ‘it’s all gone!’, as if the wages he paid did not go anywhere: most other complaints were of this nature. Very few, interestingly enough, said that it was good for the lower incomes to get anything at all, and that of course they should have got more. And my main issue was that it was mostly middle class welfare: the cutoff rate should have been lower and the amount should have been more.

    Wages: I agree that the arbitration system was one of the best in the world. Things have not improved, and it took a disastrous election for the Liberal Party to remove the spectre of Workchoices, though apparently, despite Mr Abbott’s protestations, it’s not quite dead yet (and of course while the mainstream media is run by right wing libertarians, it won’t die). any system that divided power of course was never going to fit the ‘new Australia’. but since it was dismantled, what have we had: growing casualisation, and a ‘statistical’ full employment (which doesn’t count underemployment), an overfull university system, in which the spoiled brats of the middle class get 3 extra years of child care (and waste the often very good education they’re given)

  • 28
    Julius
    Posted Tuesday, 19 October 2010 at 10:13 pm | Permalink

    @Sickofitall

    I am not going to accuse you of being wrong when you say “money doesn’t appear - it just is” but you are not strictly right when you say “Money is a finite amount, controlled by the Reserve Bank”. Even though private bankkers can no longer print bank notes the creation of credit isn’t all dependant on the Reserve Bank “printing money” (actually using electronic credits to buy existing bonds if you are talking about today’s quantititative easing in the US - and what would be done here if needed). You don’t have to call on an existing pool of money to engage in a transaction in which you give A a promissory note (which he can negotiate for currency or a bank credit) and he accepts it in payment for whatever he is selling you.

    As to your last paragraph I invite you to consider the problems both actual and a priori (given one’s knowledge of actual human nature and, in a particular, actual human nature in known Australian time and place and circumstances) which are an inevitable result of getting outsiders of reasonable intelligence and reasonable goodwill and conscientiousness and powers of objective observation BUT b all knowledge of the particular business, or, probably running any business, and none at all about the people in a small organisation. Some general rules for dealing with big organisations and thousands of people have to be imposed in some circumstances but that is exactly the rationale for a bunch of politicians assisted by on average moderately competent public servants making a whole lot of rules (by statute and regulation) which are indifferently respected, observed and enforced.

    We can’t let the people of Sydney or Melbourne form little Wild West type private security organisations (though the evidence is that, until the US government failed to prevent the Indian Wars after the Civil War the “Wild West” was a much more peaceful and orderly place than modern American cities) but the impossibility of relying on civil society alone in those circumstances is no reason not to prefer people to work out their arrangements between themselves on the scale of small businesses and their employees who, except in rare circumstances, are in a position to walk out if they don’t like the job without great, or any, loss. When a small employer says that a particular employee is lazy, toxic in his relations with others and is generally distrusted by other employees, is the likelihood of that being wrong anywhere near high enough to justify causing the employer $30,000 cost to get rid of the b******.

  • 29
    Julius
    Posted Tuesday, 19 October 2010 at 10:20 pm | Permalink

    @Sickofitall

    Sorry about literal. In my second par. read “..which are an inevitable result of [getting] *allowing businesses to be given direcdtions by* outsiders of reasonable intelligence and reasonable goodwill, conscientiousness and powers of objective observation BUT b all knowledge of the particular business, or, probably running any business, and none at all about the people in a small organisation.”

  • 30
    sickofitall
    Posted Tuesday, 19 October 2010 at 10:38 pm | Permalink

    Hi Julius: my last paragraph is a bit of a mishmash: I hit send too soon… my apologies, and you were right to call me on it.

    But, I will say that society needs controls - indeed, you could, under the old system, be assured that, provided you did your job well, you were pretty much guaranteed of a certain standard of living which was more or less the same as everyone else involved. Now, the unfair dismissal laws are a different thing. They were often rorted, and many small businesspeople were ruined through toxic employees. I agree with you there. But they were not the logical result of arbitration and conciliation: rather a perversion of them, as they gave too much power to the wrong employees.

  • 31
    Liz45
    Posted Tuesday, 19 October 2010 at 10:50 pm | Permalink

    @FREECOUNTRY - (1) It was the boss of Patricks that organised thugs on the wharves during the MUA dispute - not the Unions. In many cases, workers have been bashed by the police just for being on the street to support workers, or as in the case of Qld during Bjelke Petersen’s days, people were bashed for supporting freedom of assembly - my mate had his ribs broken by Qld coppers?
    There are many incidents of police removing their badges, and inciting trouble by their racist, sexist or anti -worker taunts. The same happens when protestors were opposing cutting down native forests etc. Then of course, there’s the ABCC that this wonderful pro-union ALP govt has kept in operation. This Howard organisation singles out construction workers and treats them differently to any other workers, in fact, people like Ivan Milat had more rights than workers do under this draconian organisation. For goodness sake, get your facts straight before you rave on with things that just aren’t true, or only tell a tiny bit of the story.

    If you bothered to do any research, you’d also find, that in workplaces where there’s a strong worker participation component in health and safety, those workplaces have less injuries and death. One of the effects of Howard draconian anti-worker legislation, made it illegal for unions to conduct their own health and safety courses, which in the case of Beaconsfield showed, that without the expertise/training of their colleagues, those two men would not have been saved. The very training those men relied on would’ve been disallowed under Howard. No govt member; no doctor; no highly paid site manager saved those men - their mates did. There’s a worker in SA at this time, who could be jailed for 6 months because he wouldn’t answer questions about his activities when he was not on work premises, and during his own unpaid time. If you want to argue these points, make sure you have your unbiased facts in place - first!

    As an injured worker, I have only admiration for the way I was looked after by my Union during the time I was off work, and after. 27 yrs later, I’m still in pain every day from a preventable injury/disease. My employer chose saving money over my health and life. I’m a staunch supporter of Unions and unionists, because I can appreciate, that if you’re on your own, you’re really on your own!

    (3) The AMA has earned the right to be a pain, because it regulates professional standards of conduct and education in a way that a non-expert agency like Parliament could not possibly do.

    What rubbish. The situation in Qld re the so-called surgeon who either allegedly killed his patients or maimed them for life, was brought to the notice of authorities via a NURSE whistle blower, not his peer. What did she get for her trouble? She was treated in a most despicable manner, and years later was still suffering from the trauma of it all.

    Then, there’s the so-called doctor on the south coast, who allegedly treated his female patients in a most despicable manner, causing permanent injury of a terrible kind. It was one of his patients who started doing some investigations asking other patients to contact her. That’s how this person was stopped. I’ve often said, that doctors have to be seen operating with a knife and fork on a busy street corner before their peers will do something. It is a nonsense to assert that they undertake any real supervision, let alone ‘dob’ on a colleague. That’s just two examples. Don’t try and tell me that these men’s colleagues didn’t know what was going on. So, why did they allow them to continue?

    The people who were the worst affected under Howard’s IR Laws were women and young people. There were several inquiries undertaken after the introduction of WorstChoices that clearly show, that workers were very badly affected by these draconian laws. I suggest you avail yourself of these reports and do some serious reading before making stupid statements that have no basis in fact and only show your own bias. What is your experiences of Unions and how they operate?

  • 32
    freecountry
    Posted Tuesday, 19 October 2010 at 11:12 pm | Permalink

    Sockofitall,

    Money doesn’t appear - it just is.

    Yes; whether the quantity of money is fixed under the old Gold Standard or kept in equilibrium (supposedly) by a Reserve Bank, at any one time there’s a certain amount of money, and you can’t create any more of it. (Unless you’re a sales rep for Securency with access to the printing presses, but let’s limit the scope to legitimate activities.)

    But a dollar is only a token for a unit of wealth, with a value that goes up or down. That’s why broad wage increases are often accompanied by inflation, leaving the workers no richer than they were before.

    But you can create wealth, whenever you enter into new trading arrangement which is to the advantage of both parties. Some good or service passes from someone to whom it’s less valuable, to someone for whom it’s more valuable, and in doing so, a bit of wealth springs into being. The money supply catches up later.

    So making wealth through increased trade and productivity is not a zero sum game. But as I said, there are other ways of gaining wealth which are merely transfers, nothing created, and those are a zero sum game.

  • 33
    Julius
    Posted Tuesday, 19 October 2010 at 11:50 pm | Permalink

    @FREECOUNTRY

    You have put some things so well on this blog that I have bookmarked it. However, I think you too have possibly mistaken one of the features of an economy with money. You say

    at any one time there’s a certain amount of money” and

    Some good or service passes from someone to whom it’s less valuable, to someone for whom it’s more valuable, and in doing so, a bit of wealth springs into being. The money supply catches up later”.

    No, money is created in the act of, to give the same example as I gave before, of a vendor selling in return for a credit or a promissory note which didn’t exist before the transaction. Now I may be wrong according to some technical definitions that a true expert on finance and banking might put me right on, but, in substance I think what I have said is closer to the truth than what you and Sickofitall have said. Not that it matters for the purposes of what is in (some) dispute.

  • 34
    SBH
    Posted Wednesday, 20 October 2010 at 12:29 am | Permalink

    sick of it all saying the unfair dismissal laws were “rorted” is a pretty big statement. Who rorted them, employees and union officials who lied under oath? Left-leaning members of the Commission? No, there was a proper ordered and legal approach to test a decision by an employer to sack someone. And they were progressively amended by the Keating government to limit their scope. You’ll go a long way to find any evidence of rorting and a short way to find a more accurate story.

    It is true that the laws required employers to show a valid reason that related only to conduct, capacity or operational requirements and that the termination was not harsh, unjustified or unreasonable.

    It’s hard to see that this is anything other than a fair and reasonable standard to apply. Until the employees had little redress if their boss just decided to get rid of them. Employers didn’t like the laws because it reduced their ‘flexibility’. Following their passage employers had to be able to show fair processes and adequate reason.

    Typically the employers who fell foul of this most reasonable test did not pay for industrial or HR advice because they didn’t value it. Employers who acted in the heat of the moment because they didn’t want to deal with poor performance in a fair and professional manner. Their call I guess but it would have been cheaper and more productive to improve your business practices and get some good advice

    The latest call for ‘flexibility’ is in the same vein as the baying for the removal on unfair rights. No serious credible evidence is advanced in support of the calls.

  • 35
    Julius
    Posted Wednesday, 20 October 2010 at 8:19 am | Permalink

    @SBH

    Apart from getting rid of one of my mother’s carers (absolutely the exception amongst marvelous people) where she forced me to go further, and win, I only have anecdotal evidence, but lots of it. It is the threat of having to prepare for a case, spend money on lawyers and waste a lot of precious management time and thinking that effectively blackmails the small employer. One who told me he paid a lot of “go-away (otherwise ‘P**s off’) money” hired a chef who was a young immigrant whose father was some sort of anti-discrimination lawyer and specialised apparently in helping vexatious litigants like his son who ignored all warnings about failing to turn up or turning up late.

  • 36
    freecountry
    Posted Wednesday, 20 October 2010 at 8:39 am | Permalink

    Julius,

    Yes, you’re right. Actually I fudged quite a few strict points for the sake of simplicity. Furthermore, if banks make loans first and seek reserve adequacy afterwards (which in fact they do) rather than the other way round, you could say every time you borrow money from the bank you create a certain proportion of it. (There’s an interesting discussion here.) But that in itself doesn’t create actual wealth.

    The main point I wanted to make is that there are two ways to become richer: by transferring wealth from a loser to a winner; or by creating some gain for two or more parties, who each enter into a trade of their own free will and who each win. Intuitively, we tend to think for every winner there must be a loser, but actually only one of those ways is a zero-sum-game; the other is a win-win. Once people realize that, even without any economic training, they can start asking themselves about every transaction: is this a win-win, or a win-lose?

    SBH,

    Of all the provisions in WorkChoices which — I agree with you — were abuses of the principle of liberty, the unfair dismissal exemption for small employers was not one of them.

    An employer who is not free to sack a worker, will be very hesitant to employ a worker. In the same way that a racing car driver who is not confident in his brakes, will therefore be afraid to drive fast and will lose the race.

    Furthermore, big companies have the means to take on a union in a court case; small businesses do not. And finally, how many unfairly dismissed workers were really not able to find another job soon afterwards — and of those who did find another job, how many of those new jobs only became available after their predecessors had been dismissed? I would suggest that dismissal only means long term unemployment for those who were either poor workers in the first place, or who were in the wrong job and later found a more suitable one.

  • 37
    SBH
    Posted Wednesday, 20 October 2010 at 8:54 am | Permalink

    Julius, So you’ve got one side of some stories. Anecdotal evidence is an oxymoron.

    FC what we’re missing - still- is evidence of a causal link between labour regulation and productivity/profit.

    Until you come up with evidence you just make Keane’s case stronger.

  • 38
    freecountry
    Posted Wednesday, 20 October 2010 at 10:04 am | Permalink

    Liz45,

    If you read my posts fully (and I admit, in this thread they are of a volume to rival your own so reading them fully may take a while) I agreed that worker organizations are vital for a balance of power between workers and employers; that the Howard government should not have taken sides; and that making it a federal crime in some cases not to come to work, on terms decided by that same federal government, is technically a step towards slavery.

    I think I also made it clear that there is a big difference between freedom of assembly, and freedom to assemble around the entrances of a workplace, blockading other people from choosing to go to work and preventing the owner from doing business. Assembly is also not a freedom if people can be coerced into joining the assembly who would not, of their free will, join that assembly. And yes, I have been a union member; in those days I had no choice and my employer told me when I started that my union fees would be deducted directly from my wages.

    On the industrial safety question, in another thread I have defended Premier Keneally’s position in which she defends NSW workplace safety laws against the federal hegemony.

    On medical ethics, SBH is right; misconduct complaints are heard by state Medical Boards not the AMA. However, medical associations including the AMA provide essential forums for maintaining and developing the ethical standards on which those Medical Board rules are based.

  • 39
    Elan
    Posted Wednesday, 20 October 2010 at 10:23 am | Permalink

    @Liz45
    “Funny how the proponents of reducing other peoples’ incomes never include their own”
    A pity you don’t know more fair minded decent people.”

    Ahhhh JULES my little chickadee! How can anything you write, be taken seriously when you write this pap!

    L45 is spot on! She knows a great deal about ‘fair minded decent people”

    You on the other hand?

    Proponents of reducing other peoples’ incomes do NOT indeed ever include their own, and by inference you call them fair minded decent people!!

    The rest is verbal diarrhoea.

    Look forward to a cosy chat you playful little scamp, you!

  • 40
    freecountry
    Posted Wednesday, 20 October 2010 at 11:23 am | Permalink

    SBH:

    FC what we’re missing - still- is evidence of a causal link between labour regulation and productivity/profit.

    You’re a bit vague about “labour regulation,” but I’m going to take a punt you’re referring to what some people consider to be over-regulation. And you should bear in mind that in some ways I considered Work Choices to have features of over-regulation.

    Julius has already provided two possible (not proven) examples of the distinction between workforce participation and workforce productivity:

    … one of the explanations for some of the apparent slow down in productivity gains during the last half of the Howard-Costello years was that less efficient labour had to be employed because unemployment rates were coming down.
    It has been argued that Singapore used deliberate upwards pressure on wages as a way of shifting its economy into more high skilled higher value added areas …

    It would be hard to isolate and prove either of these claims of cause and effect. But it is very reasonable to believe that when the “rights” of workers to keep their job, rather than the value of the job they’re doing, is the primary reason to maintain a status quo, then that status quo will be inefficient and productivity will be impaired.

    Some examples are:
    - UK coal miners demanding subsidy of coal operations that are running at a loss, just so they can have their jobs, and inventing all sorts of national-interest excuses for this rentseeking. This was one of the albatrosses around the UK’s neck which Thatcher abolished, causing productivity to take off.
    - Making it an offence, at the insistence of the AWU, to breach the Federal Pastoral Industry Award provision that the width of a shearing comb may not be more than 2.5 inches; this was the equivalent of banning computers, printing presses, or automatic washing machines.

    You might say that the first was a case of protectionism rather than labour market overregulation. My reason for mentioning the Thatcher/coal miners’ dispute is that labour overregulation, when it’s based on the worker’s “right” to keep a job even if that job is unproductive, is just a special case of protectionism.

  • 41
    freecountry
    Posted Wednesday, 20 October 2010 at 11:28 am | Permalink

    I should have said, “even if that job or that worker is unproductive …”

  • 42
    Elan
    Posted Wednesday, 20 October 2010 at 12:13 pm | Permalink

    It isn’t really all that complex.

    When ‘decision makers’: CEO’s/Boards/Managers/politicians (I put a small p because I see them as a small pee),-when they lead by example, I shall listen to what they say. It might then have some credibility.

    Little is said about Corporate excess, but much is said about workers and why they need to be controlled.
    Unions are regularly done over; sometimes for valid reasons;-but only if those reasons are connected to not representing workers as they should do. It saddens me to see working people sometimes join in this condemnation.

    Any discussion on Corporate greed is dismissed as envy; is usually almost whimpering in its strength.

    The same ‘ethic’ is applied to the FACT that wealth has dramatically increased (for who?),- and correspondingly; and -I believe- consequentially, poverty is worsening.

    Whilst this is occurring, these arsehat movers and shakers concentrate on making sure ordinary working people have the most minimal rights.

    Under Howard they got clean away with it. They are trying it on again.

    A large organisation (or small!), -will collapse if those who do the leg work walk out.

    Now if a CEO and Board walked out?

    I am delighted to see what is happening in France. How skillfully Howard controlled working people with his “we must not go back to the bad old days of strikes” .

    Bingo! Withdrawal of labour: BAD! OLD! It says ‘do not question what we do for we know what is good for you’ (part of a poem wot I ave rote).

    The French populace are currently sticking it right up a Right wing Government that cuts their benefits, but not its own.

    I argue strongly that bad workers (who DO exist) are minimal. But disgruntled unhappy, and thus unreliable workers are many,…………….and they are that way because of lousy self interested management.

    Perhaps if we had a bloody good meaty General Strike; management would get the message that workers are a vital part of business, and should be treated with a damn sight more respect and decency.

  • 43
    Liz45
    Posted Wednesday, 20 October 2010 at 2:04 pm | Permalink

    @FREECOUNTRY - I have to rush out to an AGM of a women’s health centre, but I disagree with you re ‘obstructing entrances’ etc. the only tool that a worker has when there’s an injustice in their workplace is to withdraw their labour. when others are brought in to take their place, they’re SCABS and are beneath contempt. I have stood on several picket lines, the last at Port Kembla when Howard tried to take on the MUA in a last desperate bid to retain govt. He failed - we won! I was, at one stage standing in front of a very big truck with other people. We didn’t have to maintain that stance, but I was prepared to do it. When workers are really paid a decent income; when employers are forced to introduce safety over costs in the workplace, and when people stop being harrassed either due to their sex, age or some other factor, and several areas that I don’t have time to raise at this time, then all of your assertions will have some basis in fact. Until that time, I’ll maintain my passionate defence of unions and unionists.

    Have you responded re ABCC or do you think it’s OK? Or haven’t you done any research about this, which is a blight on the behaviour of a democratic country that boasts of complying with the rule of Law. In short, this is a disgrace and it should be dismantled, so that every worker has the same rights!

  • 44
    Julius
    Posted Wednesday, 20 October 2010 at 2:53 pm | Permalink

    @SBH

    Julius, So you’ve got one side of some stories. Anecdotal evidence is an oxymoron.” Literally and logically plain wrong. If I were told, a few hundred years ago, about the observations of a number of people keeping diaries on their lengthy sailing voyages in different ships at different times and they concurred in telling me that the native people in the tropics were all dark skinned I would have perfectly good anecdotal evidence of some weight, and of just the kind that has been used from time immemorial with fair reliability. As it happens I haven’t just heard one side of a story. I have seen that in many there was no possibility of the employer getting a good economic outcome because the only prospect he had was a win but at considerable cost, or a loss at only a bit more cost.

    @Elan.
    “Funny how the proponents of reducing other peoples’ incomes never include their own”
    A pity you don’t know more fair minded decent people.” …. “How can anything you write, be taken seriously when you write this pap!” and, to prove that your greatest offence is absolutely one of impeccably fallacious logic you say, with emphasis:
    “Proponents of reducing other peoples’ incomes do NOT indeed ever include their own, and by inference you call them fair minded decent people!!”

    You really take the prize for the literally and logically wrong. There is just no way in which anything I say can be taken to imply that proponents of reducing other people’s incomes but not their own, or indeed at all, are “fair minded decent people”. And I have in fact joined in voting for reducing my own income, as did a lot of my colleagues, in the course of taking necessary action to reduce a lot of people’s incomes to some extent….. One example is enough as a matter of logic to falsify your extraordinarily extravagant overstatement.

  • 45
    freecountry
    Posted Wednesday, 20 October 2010 at 4:35 pm | Permalink

    Liz45,
    Re the ABCC, you are trying to attribute to me a position I have not taken. Try reading what I said. Re blockading workplaces:

    when others are brought in to take their place, they’re SCABS and are beneath contempt. I have stood on several picket lines, the last at Port Kembla when Howard tried to take on the MUA … We didn’t have to maintain that stance, but I was prepared to do it.”

    Thank you for illustrating my point so colourfully.

    SBH,

    One of the things that the boss repeatedly fails to grasp is that the money is not the most important thing to workers.”

    That’s often true. Workers, even “scabs” who are “beneath contempt,” first need to make enough to support their families. But beyond that, left to their own devices they will often take satisfaction chiefly from doing what they do well, with a minimum of obstruction either from management, unions, or freeloading colleagues.

    The 1998 MUA dispute was all about money and power; it had nothing to do with safety or reducing working hours. In fact Patricks wanted, among other things, workers to go home to their families after a fair day’s work, instead of disabling the cranes until their shifts ended and then miraculously repairing them once the overtime penalties kicked in.

    Let’s not be disingenous here. Wharfies have the power to stop Australia’s international bulk trade in its tracks. When I questioned a couple of young Sydney MUA (hereditary) members about this power two years earlier, they laughed and boasted that they had things pretty well set up for themselves.

    It’s for similar reasons that parking inspectors in high density areas (who can cut off a local council’s lifeblood at any time) are far, far better paid than highly skilled workers like motor mechanics and electricians who have high rates of serious or even fatal injuries on the job. Even better paid than schoolteachers, who are arguably the most important industry of them all in the long term, but totally powerless over short time frames.

  • 46
    Liz45
    Posted Wednesday, 20 October 2010 at 6:28 pm | Permalink

    @FREECOUNTRY - I disagree with you about the MUA dispute. It was about a practice of using a foreign country(Dubai) and untrained workers to take over the jobs of those who already held them. It was also about the disgraceful, probably highly improper if not illegal of a national govt doing that to a group of its citizens. You quote the sentiments of the bosses coupled with a”a couple of young Sydney MUA (hereditary) members” as a premise for your all embracing assumptions. This is not a fair position to take - you negate too many other facts that add a different complexion to the issue.

    On the position of workers pay - women ini this country are back in the 80’s re equal pay. Too many women have to work an extra 65 days per year to be on par with men who are doing the same work. I recently went to a function that celebrated the active lives of three women - collectively about 160 yrs of activism. One was a schoolteacher now retired. On her first pay day at her new school, with her male colleague, she was outraged to learn, that her pay was at least 65% less than his - they’d been to college together, graduated together, were at the same school with classes next door to each other, and her pay was less - she then became an active member of her Union. It was to be another 5 yrs before female teachers gained equality.

    I can remember when married women couldn’t nominate their husbands as beneficieries of their super if they died. The same applied to single men. It took another campaign before this unjust situation was corrected.

    The last increase in the wages for people on low incomes was to benefit all workers in that wage bracket. An employers group in NSW went to Court to ask for employees in Community Organisations to be exempted - they won. This meant, that yet again these people, mostly women were denied natural justice - in my view. When this is coupled with the fact, that people employed by the NSW Govt are paid at a higher rate than their compatriots who do identical work(mostly women) are paid less, this is a travesty. I don’t recall any of the msm pointing this out. I went to the Sydney Town Hall on June 10, and joined over 3,000 workers to demand equal pay. I’ve not been in the paid workforce since 1983 due to a preventable work injury, but as a board member of the Centre already mentioned, I was there to support those wonderful women who work bloody hard, and whose imput this community would feel if they weren’t there.

    People like you can make all sorts of murmerings about only so much money etc. You can plead the cause of the employers, but the fact is, this is a very prosperous country. We boast of believing in a fair go. We boast of adopting fair and reasonable policies re workers, and yet this abuse of these peoples’ basic rights as employees is allowed. A person working in a state govt office is paid at a higher rate, than one doing the same or similar work in a community based workplace. Shameful!

    When you’ve lived your life inside a male, privileged body, you see things through a different set of realities than those of women, particularly those who are being denied equality in the monies received for their labours. It is a disgrace! Imagine if female politicians were paid less than their male colleagues? Shock horror! But, Fair Work Australia via Julia Gillard obviously doesn’t care about this disparity in the worklives of other women.

    Have you checked out any of the reports undertaken during the Howard years re the effects of workchoices? Do you know what the death and injury rate is for men in the construction injury? Do you know what the death and injury stats are for young people between 16-25?
    Do you know, that under Howard, profits increased by 5% while incomes decreased by 5%? Some CEO’s incomes increased by 150-300%. In the last 10 yrs, the cost of living increased by 40%? I’m damned sure wages, pensions, benefits etc didn’t increase by anywhere near this amount! 7 of those yrs were under Howard/Costello! Surprise, surprise! They looked after their mates very well though!

  • 47
    freecountry
    Posted Wednesday, 20 October 2010 at 7:24 pm | Permalink

    We’re making points that are very similar, Liz45. When women gain the power to stop the ports, the buses, the trains, the roads, the airports, or any other critical economic choke point, starve the local councils, or otherwise cost lots of people a great deal of money by halting work — and are prepared to use that power and defend their turf by any means necessary, then they too will join one of those privileged clubs like the MUA and experience the gravy train.

    But make no mistake, the wage premium extracted by such means will come, as usual, out of the pockets of those left behind in florist shops and restaurants; as well as out of the pockets of the poor old motor mechanics on whom our lives depend but who make about $600 a week and typically have to BYO tools and put aside something for when their backs get broken.

  • 48
    Liz45
    Posted Thursday, 21 October 2010 at 12:38 am | Permalink

    @freecountry - What a load of rubbish! In a just society that believes in a fair go and spuiks this loud and proud on a regular basis, it’s absolute bs for you to respond like you have. IF all women who are being treated unfairly re pay and conditions went on strike, the country would stop. We can cope for a while without ships being unloaded or food being delivered etc, but we couldn’t cope if teachers stayed home; nurses stayed home; people keeping govts running stayed home; women police stayed home; bank and telecommunication services closed down; child care centres closed their doors, and many other areas that employ women didn’t function? Think about it!
    You’re just reinforcing the sexist stereotype attitude, that women’s jobs aren’t as important as men’s. If it only involved teachers and nurses there’d be a major crisis! Of course, if women also went ‘on strike’ at home, there’d be chaos and mayhem!!!!!

    The best protection for all workers is to be a member of a Union, and then to get off their arses and make them work. I support the ideal of employing unionists first. Why should a worker who isn’t a member of the Union get the same advantages/rights/ wage increases etc when they don’t pay their dues and haven’t gone without pay when their mates went on strike. They’re the real bludgers in my view. I could never be one of those people!
    There’s a lot to be said for the saying ‘if you don’t fight you lose’? Nowhere is this more evident than when workers fight for a better deal.

    In my extended area, miners had been on strike for about 2 yrs over pay and conditions. After a long time of either no income or little income, they won. A very good day!These men stuck together, and their wives/partners and families stuck by them. Very brave people!

    Incidently, as electricians are in short supply, I suspect that they’re being better paid than motor mechanics. Having said that, I must confess to not knowing much about the number of mechanics. I DO know, that plumbers are pretty well off these days. This leads me to another very important point. I can remember Unions voicing their concerns during the Keating years re the shortage of electricians and plumbers, and warning that this would be a real problem in the future. They were right. The same applies to doctors. When the current medical specialists retire, I doubt whether their places will be filled. This came about, because the medical profession had too much influence re the number of uni spaces for medical students.(they didn’t want too many in competition). I also recall Howard insisting, that no Uni course would cost over $100,000 - another lie!

    Incidently, while it might seem like it to you, I doubt very much, after reading your views, that you and I have much in common at all! The battle for decent wages and conditions is far from over. I suggest, that I’ll be more involved in future struggles than you. I’m proud to do so!

  • 49
    freecountry
    Posted Thursday, 21 October 2010 at 8:40 am | Permalink

    Is anyone else still in this conversation? Because, while the verbalized thuggery of Liz45 does help make my point for me, it is a waste of time if I’m all alone talking to a revolving door here.

  • 50
    SBH
    Posted Thursday, 21 October 2010 at 9:37 am | Permalink

    FC, I’m really busy today and don’t want to open up a whole new field but your characterisation of the Patricks’ dispute is simplistic and your charcterisation of wharf workers unjust. Its worth remembering that one of the lingering after effects of the Patricks dispute is the ability of a company to simply restructure or fold and re-open to avoid accrued employee entitlements. Wharf productivity could have been achieved in a much more civilised way that the thugs, scabs and dogs that Patricks used.

    Sorry I probably should have said ‘the level of labour market regulation’

    Julius hilariously wrong. But just to light the blue touch paper on your petard - read Watkin Tench’s accounts of just how wrong James Cook got his description of Botany bay and Port Jackson. Or look to Cook himself whose demise was a result of his one-sided patronising lack of understanding of the Hawaiians. Or the flatly dishonest view of this country being terra nulius or Aristotle’s geocentric universe (promulgated in the face of Eratosthenes evidence to the contrary) or herodotus’ snakes with wings or mermaids and sea serpents or ….. well you get the picture.

    And hey here’s an idea. Next time you have a dispute with someone let the outcome be decided by someone who only hears from the person you disgree with. What could be fairer.

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