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Federal

Nov 2, 2011

Delegitimising unions in the great game of labour v capital

As voters become more estranged from corporations and economic reform, neither labour nor capital is responding effectively to the sentiment.

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It may not look it, but there are strong links between the Occupy protests here and overseas, and more formal political debate and public discourse, which naturally has been dominated by the Qantas dispute. And not just in the vague sense that both deal with the economy, or capitalism, or markets.

Let’s be clear about the long-term business agenda in Australia regarding industrial relations. It’s an agenda aimed not at improving productivity — as I and others have incessantly showed, the last round of IR reform led to a drop in labour productivity — but a more self-interested one aimed at reducing labour costs and neutering unions.

Business is quite tolerant of trade unions, as long as they do nothing that inconveniences business or increases labour costs. They can even be a useful form of alternative pressure on governments when industries set about rent-seeking. Neutered unions are quite acceptable. Real ones, that aggressively represent the interests of their members, aren’t. And ones that actually take industrial action, in particular, are regarded as outright enemies of business.

This is the ultimate thrust of IR reform — to pathologise industrial action, however legal, however justified. The point is to frame the right to withhold labour as an illegitimate form of economic vandalism, no matter what the circumstances.

Thus the incessant business complaint that the Fair Work Australia framework is too “pro-union” because it allows unions to take industrial action once a number of legal hurdles have been cleared. And the logic of Qantas’s actions on the weekend was to break free of the normal industrial dispute provisions under which it was operating, in which unions could continue to take wholly legal industrial action which (as Fair Work Australia found on Sunday night) did not pose a significant threat to Qantas.

This is business’s particular self-interested contribution to the liberal economic reform project. The IR component of that project, starting in 1993 with the Keating government’s provisions for enterprise bargaining and accelerating in 1996-97 with Peter Reith’s reforms to deliver individual contracts, was to remove the impediments of a centralised bargaining system from a modern, open economy, allowing enterprises to respond to competition more flexibly.

Coupled with globalisation, deregulation and corporate tax cuts, the reform project has delivered a huge increase in the corporate sector’s share of national income — at the expense of labour, as this graph from the Australian Council of Trade Unions shows:

The wage share of national income in Australia has only recently come off historic lows. But on this we’re no different from the United States or the United Kingdom, where wage share has also dropped over the last three decades to historic lows of around 50%.

Australian business clearly doesn’t believe the wage share has fallen low enough. That’s what drives its agenda to go further and undermine collective bargaining, a key part of which is the right to withhold labour, something businesses have been trying to do since the time of the Combination Acts in the early nineteenth century. Australia remains, for its corporate leaders, a “high wage” economy that struggles to compete internationally. For globally-mobile capital, there’s always a lower-wage country somewhere else to move to.

That same global market, however, has been the justification for a massive increase in executive remuneration, which as Prof David Peetz has shown, accelerated in the 1980s but then really took in the late 1990s.

Now, you can look at this from a union perspective and rail about income inequality and overpowerful corporations, or from a corporate perspective and point out that it’s the logic of a global market. And that market is currently delivering strong employment growth and growing income to Australians. But either way, it is driving the growing anti-corporate sentiment in the community, the opposition to further economic reform and the desire to reverse some reforms like privatisation. The Occupy protests are only the most vocal point of this deep and wide community sentiment that corporations get all the benefits of the economic system while the community gets all of the costs.

Where unions have failed is to tap into this sentiment. Capitalism operates most effectively by atomising the individual, by ensuring that an individual’s primary relationships are one-to-one relationships with producers as a consumer, and with employers, as a worker. Traditional systems that establish links cutting across these one-to-one relationships — unions, churches, political parties — have all been in decline in recent decades. Now the internet threatens to establish a different set of relationships and communities at odds with capitalism. But unions still retain some of the power that they once had to disrupt capitalist relationships, which is why business wants to neuter them.

The challenge for unions is to find a way to effectively channel those community concerns. Some of the more politically effective unions, like the Australian Workers Union, would argue that that is exactly what they’ve done through outcomes like the recent steel industry package. They also face an often hostile media environment that reinforces the illegitimacy of industrial action.

Alternatively, the challenge for business is to find a way to address those concerns themselves, to stop the community seeing them as a problem, the beneficiaries of a rigged capitalist game. Continuing to reflexively wage industrial relations wars wouldn’t seem to be the best start in doing that.

Bernard Keane — Politics Editor

Bernard Keane

Politics Editor

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

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135 comments

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135 thoughts on “Delegitimising unions in the great game of labour v capital

  1. Jimmy

    “It still doesn’t change the short-term trend, because the trend has been consistently upwards since 1997.Even if you do something dramatic like put in .34, .33, .31, .31 for 1990-94, it still doesn’t change the positive trend for the last 15 years.” Yes the trend is still positive but a lot flatter and less significant. What happened around 1997 that might impact the short term trend? Howard taking office?

    “Congratulations on completely missing the point.” So what is the point? Surely you are not trying to say that women who have had babies and received a parental leave payment become unemployable?

    “I am merely observing there has clearly been a problem brewing for the last 10-15 years, with an increasing trend of inequality.” We have a very slight trend yes but what do you want done about it? My point is that the slight upward trend will be reversed by reforms already taking place.

    “Further, I’m quite mystified with your insistence there is – and has been – nothing to be concerned about, given your obvious disdain for the politics that caused it, and support of policies aimed at increasing income equality” I suppose I am trying to convey that a slight backwards movement over a period which coincided with one of the most conservative govt’s of recent times ans still leaves us in a position that in envied around the world is not something to tkae to the streets about. In many respects the people saw this happening back in 2007 and changed the govt. Since then we have had increased spending in Education and health, increase in pensions and now we will get the MRRT and the carbon tax. The issue is already being addressed, we are not in the same boat as the US.

    Also you referred to an almost certain defeat for the ALP at the next election, don’t be too sure, there are some green shoots starting to appear for the govt and Abbott has many many policy holes, if the Carbon tax is allowed to run for a year or so without the sky falling in his one weapon will be blunted.

  2. drsmithy

    It’s not the missing years that are important, it’s the starting point of your trend line, have a look at it, it’s starting below 0.302 which isn’t the case, the trend for the 15 years from 1991 to 2004 would not be as great as your trend line predicts.

    It still doesn’t change the short-term trend, because the trend has been consistently upwards since 1997.

    Even if you do something dramatic like put in .34, .33, .31, .31 for 1990-94, it still doesn’t change the positive trend for the last 15 years.

    How so, the GFC related number is higher, the rich don’t get effected by financial downturns as much as the poor.

    My bad, I was looking at the 09/10 number.

    Though I do think you are grossly overestimating the impact of the GFC in such a short timeframe, especially here in Australia where the effects were relatively mild (our pain is still to come).

    I am saying let’s not look at the short term becasue it isn’t significant (as you agree) let’s look and plan for the long term?

    My comment about the significance of the trend was its magnitude, not its implications. The implications are significant, and stem from the consistency of the uptrend.

    You need short-term policies to effect long-term change, so being cognizant of what’s going on in the short term is important.

    Increasing the tax free threshold, increasing SGC, increasing pensions, increasing FTB what unintended consequences could these possibly have?

    The whole point is we don’t know until they’ve been implemented. That’s the problem with economics.

    So getting six months of paid maternity leave will set them up for life? It’s not as if the unemployment rate is so high they won’t be able to find a job if they want one.

    Congratulations on completely missing the point.

    And you would prefer to look backwards and say look at how bad things are rather than look forward and suggest ways of fixing a problem because of possible unitended consequences?

    Uh, no, that’s not even a vaguely accurate summary of anything I’ve said.

    I am merely observing there has clearly been a problem brewing for the last 10-15 years, with an increasing trend of inequality.

    Further, I’m quite mystified with your insistence there is – and has been – nothing to be concerned about, given your obvious disdain for the politics that caused it, and support of policies aimed at increasing income equality.

  3. Jimmy

    “Look, even if you throw in some 0.29 for the missing years of 1998, 2000, 2001 and 2004, it *still* doesn’t have a major impact on the trend.” It’s not the missing years that are important, it’s the starting point of your trend line, have a look at it, it’s starting below 0.302 which isn’t the case, the trend for the 15 years from 1991 to 2004 would not be as great as your trend line predicts.

    “Uh, you do understand the GFC related impact is dragging the trend _down_, right ?” How so, the GFC related number is higher, the rich don’t get effected by financial downturns as much as the poor.

    “Many years (5-10+) of improving numbers will be needed to flatten and reverse the short term trend.” I am saying let’s not look at the short term becasue it isn’t significant (as you agree) let’s look and plan for the long term?

    “Yes. That’s because their actual impact is unknown. It is not at all inconceivable that these policies may have unintended consequences that make the situation worse.” Increasing the tax free threshold, increasing SGC, increasing pensions, increasing FTB what unintended consequences could these possibly have?

    “For example: paid maternity leave may result in an increase in women who _never_ rejoin the workforce” So getting six months of paid maternity leave will set them up for life? It’s not as if the unemployment rate is so high they won’t be able to find a job if they want one.

    And you would prefer to look backwards and say look at how bad things are rather than look forward and suggest ways of fixing a problem because of possible unitended consequences?

    “Given Labor’s shift to the right in a vain attempt to win over Liberal voters, capitulation to big business (eg: the mining lobby), and looming defeat at the next election, it’s a 50/50 bet at best.”

    Is the proposed MRRT better than what we have now? Is the carbon tax (which won’t be repealed) better than we have now? Is Labor still further left than Howard? The answer to all these is yes.

  4. drsmithy

    The whole point is that the the trend isn’t for the full 15 years, it goes down then goes up and then goes back down to almost where it start for the first 10,

    Look, even if you throw in some 0.29 for the missing years of 1998, 2000, 2001 and 2004, it *still* doesn’t have a major impact on the trend.

    then we don’t have data for a year, it goes up significantly, then we have the GFC which skews the data.

    Uh, you do understand the GFC related impact is dragging the trend _down_, right ?

    Assuming pre 1994 figures are lower than they are.

    The pre-1994 figures aren’t relevant when looking at the trend of the last 15 years. Any more than the post-1994 figures would be if you were comparing from 1980 to 1995.

    The point you continue to ignore is the impact of the Carbon Tax and MRRT and related legislation plus things like paid parental leave, pension increases and changes to FTB and youth allowance this govt has brought in will have on the future of this “trend”.

    Yes. That’s because their actual impact is unknown. It is not at all inconceivable that these policies may have unintended consequences that make the situation worse.

    For example: paid maternity leave may result in an increase in women who _never_ rejoin the workforce, which would meaningfully lower overall household incomes for middle and low-income earners and increase the Gini coefficient.

    Given the insignificant incline it is not hard to imagine disappearing and even the 30 year trend to continue.

    Many years (5-10+) of improving numbers will be needed to flatten and reverse the short term trend.

    I’m not disagreeing that it could improve. My point is that it has been steadily and consistently getting worse since the mid-90s and that fact should not be ignored or dismissed as you are suggesting.

    With the Howard govt wasting it and taking this country further to the right. This situation now having changed can you expect the “trend” to continue?
    Given Labor’s shift to the right in a vain attempt to win over Liberal voters, capitulation to big business (eg: the mining lobby), and looming defeat at the next election, it’s a 50/50 bet at best.

  5. drsmithy

    I understood the point but it still doesn’t necessarily mean that those people are living in “poverty” based on either objective or global standards.

    They may well be of course but it won’t be because this test says so.

    Of course not. It’s a guideline, not a mathematical certainty, and I don’t think anyone has suggested otherwise.

    What the guidelines is saying, is that *usually*, when incomes are less than half the median, the people affected will be living in poverty (ie: a significantly lower quality of life) compared to the rest of society.

    Obviously with small or unusual sample groups, this can produce odd results. It needs to be applied across a representative sample of a whole society to be meaningful.

    Of course, none of this (or the discussion about GINI trends) means that your views on increasing inequality are wrong. In fact I would probably agree with you based on both empirical observation and the fact that this is a fairly obvious outcome in a globalized world.

    It doesn’t need to be, is the point. It’s not written in stone. We can bring the bottom up rather than take the middle down.

    Of course DrSmithy you have just highlighted one of the absurdities of the GINI coefficient. It is not a measure of whether everyone is well-off or above a certain standard of living but simply whether they are “equal”.

    The mind boggles as to why a metric that is meant to offer a metric of inequality, should be considered “absurd” because that’s what it does.

    Do you think screwdrivers are “absurd” because you can’t paint a wall with them ?

  6. drsmithy

    Your trend lines assume pre 1994 figures are much lower than they actually are which exaggerates the trend (put in a 1990 figure of 0.3 and see what happens to you trend),

    It flattens it, as expected.

    The fact remains that no matter what you do with the earlier numbers, the short term trend (10-15 years) is upwards, and this is something to be concerned about, especially since it was happening during what was supposed to be an economic boom. The medium-term trend (say, 30 years) is still (just) downwards, but the consistent positive slope for the last 15 years is rapidly flattening it out.

    15 years is not a blip. It’s nearly a whole generation.

    you also use the highest non GFC figure as a norm rather than out outlier which to me further exaggerates the trend.

    I did it both with and without the highest numbers. The trend is still quite clear.

    It’s also questionable whether the high 2007 figure really is an outlier in an absolute sense, without having a 2006 figure to compare against, especially in the context of the 2009 figure being lower than it would “otherwise” be thanks to the GFC. It stands out with the data as given, but if 2006’s figure was, say, 0.325, it wouldn’t be anywhere near as dramatic to see .336 in 2007.

    You yourself have said “The overall trend from 1994 to 2010 is clearly, if not significantly, upward” Clarity and I are saying a “not significant” trend requires more data to prove it is more than a statistical anomaly.

    Which raises the questions of a) how long must it go on before you don’t consider it a “statistical anomaly” ?

  7. Lady White Peace

    Well whatever Dr S… you may be right but statistics are not as telling as some might think..
    Regarding the taxi fare and some people paying a lot more than $100 it still doesn’ t make sense. What if those people who are paying as much as my cab fare home, paid a reasonable amount, and they, our pilots could get a reasonable salary?? Take into account that it takes a pilot over 100 flying hours and around $150.000 to obtain the minimum hours… before s/he can get a job in an airline; whereas a cab driver – well I could drive one better than a lot of cabbies and besides, they don’t
    own the cab it is owned by companies.

    If instead of budget airlines, who still make heaps of profit, by cost cutting which translates to – CUTTING SALARIES & BENEFITS to STAFF!! They focussed on reasonable fares and reasonable salaries and benefits to their staff, without whom.. they would not have an airline! Perhaps this would be more in line with what is right and enables a dignified life, which is what we expect to have in Australia.

    I am so over the corps having it their own way or the highway. RIght now in Paris( actually it’s in Cannes ) we have the G20 and all the “leaders” have gathered to talk economy…… and how many of the general public are aware that this Conference is funded by the Corporations and so “our” leaders listen to the facts, figures,statistics, computations etc etc of the Corporations, get dizzy trying to pretend they understand what they are hearing….decide on some new policies that adversely affect the middle and lower classes…. and come back home feeling important, when all they have done accomplished is to have the wool pulled over their eyes, by those who really rule the world right now!

  8. Lady White Peace

    In reply to ClarityProvider regrading qantas remaining a “premium” local service relying on tradition and Ozzie Ozzie etc to keep customers.
    May I say that your perspective has not clarified anything only given your opinion and what your perception of clarity is.
    Qantas is an brand which is (was) second to none. It relied on it’s amazing safety record, (yes that safety record was even mentioned in an American movie) which btw, inspired thousands of yanks to use it in preference to United when they came to Sydney for the Olympics in 2000.
    May I also say that the top earning airlines of today are Etihad and Emirates and …. the reason is that they do not
    repeat do not , lower their standards, in fact have raised them. They do not pay miserable salaries to Captains and Flight crew, in fact pay double what Qantas does…. and guess what? they are making a fortune by maintaining a “premium service” It may shock you to know that there are many who travel extensively and don’t appreciate being cramped and uncomfortable for hours and prefer business class. And QF was second to none in this area….UNTIL the big day dawned when it was decided to flog Qantas ….. but the sale “collapsed” to the relief of many Australians who actually want to see their Flying Kangaroo fly to every city in the world. There is such a thing as loyalty and sentiment it’s not all about money you see.

    However the strategy that has been in place since the “collapse of the proposed sale of QF” has been to increase the amount of money that QF has given to Jetstar so that Jetstar can be the ” star: and QF being slowly shut down. Do your research Dr Smithy and find out what orders have been made and other interesting items that have been going on behind the scene. SO Alan Joyce used to be the CEO of Jetstar…. they implemented horrific deals for Aussie Pilots
    1) Cut in salary 2) no decent meals on flights… just a sandwich 3) rest period to be taken sitting in Yclass cabin with
    passengers and other demeaning and demoralising regulations. The latest insult is the payment of Pilots in NZealand $$$’s … one really wonders how low can it go. But then, Alan Joyce began his career at Ryan Air, and that is the lowest of the lowest of the cheap and nasty budget airlines in Europe.

    Another thing to consider WHY DO WE THINK THAT WE SHOULD PAY $100 FOR A FLIGHT, WHEN TO GET A TAXI FROM SYDNE AIRPORT TO MY HOME COSTS ME $ 70. Can anyone clarify that ridiculous state of affairs for me?

    Btw, in replying to your comments I cut and pasted your post and inadvertently reposted your comment…apologies.

  9. ClarityProvider

    DrSmithy

    To flesh out your example, lets call your hypothetical country Dominican Republic (DR) and lets situate it next to a country called Haiti. To better reflect the situation we are talking about lets assume the two countries have free trade.

    In Haiti 1% of the people also live like kings but the other 99% range from those that have no shelter, high risk of violence or disease and don’t know where there next meal is coming from to those that have basic shelter, high risk of violence or disease and still don’t know where there next meal is coming from.

    Given your “dormites” have both shelter and a feed I would not classify them as living in poverty based on the international benchmark in our example and would suggest that they should consider themselves extremely fortunate given the living situation of their trading partners. Your “dormites” have better living standards than almost half the population of our theoretical planet and have both shelter and food.

    To further prove how silly this whole “relative poverty” concept is, let’s now assume that the “top 1%” of DR decide that they would like to base themselves on an island located in Haiti.

    Your statistical test would now say that the “dormites” are no longer “living in poverty” despite no change in their living standards whatsoever.

    And of course if the “ex-DR top 1%” help out some locals on their Haitian island (say giving them food every second night) then your test would again say that the island residents are no longer “living in poverty” since they are better off than the almost 98% of Haitians who don’t know where any of their meals are coming from.

    I’m sure I could keep going (billionaires dining on caviar off the stomach of a supermodel lounging on the front of their yacht “living in poverty” whilst the fed slaves in the country next door “live large”) but hopefully by now you get the point!

  10. drsmithy

    Not at all, remove the GFC effected year as anamolies and a couple of years of around 0.3 and the tend disappears

    “See, there’s no upward trend at all if you take out all the high numbers.”

    Just… Wow. Talk about cherry picking.

    This is what the trend looks like using all the data.

    This is what it looks like if you take out the two highest numbers.

    This is what it looks like if you take out the two lowest numbers as well (ie: be as generous as possible).

    If you can’t see a clear and consistent positive trend there, there’s nothing I can do to help.

    Just for the hell of it, this is what a 0.002/yr decline for the next ten years looks like.

  11. fredex

    Jimmy [and other]

    This discussion started when I pointed out that your claim that the Oz gini coefficient was improving :
    you wrote:”“Also as I posted earlier our Gini coefficient is actually improving i n the last 20 years ……”
    was in fact , as measured by the ABS, actually incorrect.It is not improving. It has got worse.
    I have given you the numbers.

    Please acknowledge such.

    Secondly I gave you a figure for increasing poverty and between us we hacve ACOSS saying [correctly] the figure was about 9% in 2004 and NATSEM [do you know who they are?] saying a tad under 12% 2 years later
    Thats a worry. Or should be. Even if poverty is worse in India or the US or somewhere else we should not be happy about increasing povert here.

    The 2 sets of figures [poverty rate and inequality] are related.
    Its not a coincidence both are increasing.
    As for the current poverty rate, the NATSEM figure was the last time it was worked out [in 2009], less than 2 years ago, thats a normal delay for hindsight.

    What is it likely to be now and the future?
    Dunno.

    An indicator, a strongly related factor, is unemployment rates. Note the plural.
    We usually only see one rate cited.

    In 2008, immediately pre-GFC, the UNemployment rate was 4.0%.
    The UNDER employment rate was 5.0%
    Are you familiar with the term, concept and significance of UNDERemployment?
    In ’09 unemployment [I’ll stop capitalising] was 5.8% [GFC] and it was 5.2% last year.
    Currently about the same.

    It has increased since ’08.

    Underemployment in ’09 was 7.9% [GFC] and went down to 7.2% last year and is about the same now.

    It has increased since ’08.

    Not good.

    We need the stimulus to be continued.
    But it isn’t being continued.
    Not good.

    We need to continue, actually re start, the stimulus and that means we need to increase the deficit.
    Read the last 6 words again.

    But political pressure is not going to let that happen, all the neo cons will jump up and down amplified by the media and the govt is too chicken.

    So, given that the stimulus has washed out of the system, that the international picture is not good, that our economy is best described as ‘flat’ at the moment [as the doc said above the indicators are weak at best], I’m not optimistic about the future.
    And to bring this back to QANTAS, now is not the time we need our[ex] national carrier pissing jobs off overseas, and blackmailing our government by harming our tourist economy.

    I’m off to pick up my car from the garage.
    Have a nice day.

  12. Jimmy

    Dr Smithy – “Why are you ignoring all the numbers between those two ?” Well we had 94-5 – .302
    95-6 – .296 96-7 – .292 97-8 – .303 99-00 – .310 02-03 – .309 03-04 – .306. So we Are missing 00/01 & 01/02, we have to figures below the 94/95 figure one pretty much the same and 2 above hardly demonstrative of a trend. Graph just those figures and then tell me the trendline.

    “Why would the 05/06 figure be considered an outlier when it’s quite clearly in line with the trend ?” From 94/95 to 05/06 there is nothing even close to the 05/06 figure, it only becomes part of the trend line if you include the higher GFC figures?

    “I said a value of between .31 and .32 for 2010/11 would be consistent with the clear trendline that exists from 1994 to 2010.” That isn’t the same as “returned” to trend how?

    “4 years ? Where does that come from ?” When did they GFC start again? roughly 4 years ago?

    “China is slowing” Yes but still going at close to double digit growth.

    “America is stalled, sliding slowly backwards” Not according to the recent growth figures but I agree it is hardly going gangbusters.

    ” If you graph it out, the trendline runs from about 0.3 in 1994 to about 0.315 in 2009.” only if you include the GFC figures which are clearly not the norm.

    “We are not heading towards prosperous times.” Australia isn’t heading for economic oblivion, we have plenty of room to stimualte the ecomomy both the monetary and fiscal policy.

    Plus as you keep ignoring we have legislation that will spread the wealth coming through

  13. ClarityProvider

    The critical issue here for Qantas is whether they:

    (a) remain a “premium” local service relying on tradition and “Ozzie, Ozzie, Ozzie” to keep customers buying tickets. Maintenance can be 100% local and more extensive than international standards and it will survive so long as customers are willing to pay a premium for “local” (generally dud) service;

    OR

    (b) become a pan-Asia low-cost airline competing in the global marketplace on the basis of international labor and maintenance standards and conditions. Even Blind Freddy can see that this model cannot cope with the demands being made the unions.

    For those stuck in their 70s, 80s or even 90s time warps, the fact is we live in a globalized world where consumers have more information and choice then ever before.

    Qantas could cede to the demands being made by the unions but the likelihood when one takes into account the realities of the global marketplace is that this would result in their eventual demise. Presumably Qantas management have formed this view for them to take such a “high risk/brand damaging” strategy as the grounding of all flights.

    This is not a debate about executive remuneration, shareholder greed or the philosophy of capitalism but simply whether Qantas management has the right to determine the direction of their business going forward?

    Reality would suggest that union members, rather than lining up behind their masters to protect entitlements, should be thinking creatively about how they can position themselves for the brave new world of global air travel. The beauty of capitalism is that those that show creativity, enterprise and a willingness to adapt to change will be rewarded and those that fight tooth and nail to protect entitlements (ie personal “rent seeking”) will be doomed to eventual failure.

  14. David Hand

    I agree with the part of Bernard’s piece regarding the obcene levels of executive remuneration paid to mostly underserving non-performing insiders. It is destructive to the social fabric of our society and smells distinctly like robbery, larceny and plain theft. All legal, of course. Hell, I would take part in an occupation myself if that was the agenda.

    Where I part company with the workers campaign is the fond memories they seem to have about the glory days of mass bargaining powerful unions setting awards with arbitration institutions effectively running businesses through binding judgements.

    The problem with Bernard’s graphs is the use of about 1980 as the starting point. This was the nadir of the keynesian social economic management that had grown since the 1930’s. Keynes was right to describe the ability of governments to stimulate economic growth through government spending and the thing worked splendidly until it had reached the extreme where the government owned everything, regulated the life out of what it didn’t own, told employers what to pay their workforce limited international trade through exchange controls, strangled economic activity through financial regulations and generally ran things, to quote David Lange, the NZ prime minister where I lived at the time, like a Gdansk shipyard.

    Most of the western economies were dragged kicking and screaming into a more traditional market driven economic environment because they had simply run out of options to socially spend their way forward.

    So when you look at the executive pay, for example, though I agree we are being robbed today by incompetent shysters, remember that in 1980, they were mostly public servants.

    Whatever you may think about the lock out, Qantas is in a fight for its life at the moment and workforce flexibility is vital for it to have a future.

    I listen to pilots droning on to us longsuffering passengers about how important it is to have Qantas pilots flying Qantas planes and ask myself why? What’s a Qantas pilot anyway? Probably someone fat and unhappy on a 50 year old restrictive EBA.

    I listen to engineers claim that engine maintenance going off-shore will increase the risk of planes falling out of the sky and I ask myself why the only decent aircraft maintenance in the world is done in Australia? Has a Singapore Airlines flight crashed recently? What skills do Australian aircraft engineers have that Asian, American or European engineers don’t have? Probably someone fat and unhappy on a 50 year old restrictive EBA.

    I put up with tired unhappy 25 year veteren cabin crew go through the motions for the 22oooth time and ask myself why aren’t there a few of those motivated, happy and friendly cabin crew like they have on Virgin? Probably someone fat and unhappy on a 50 year old restrictive EBA.

  15. Lady White Peace

    And Mass Protests are what we are seeing and they are about to get larger as the old problem of Labour Versus Capital continues. What both need to realise is that without each other they cannot survive! It is like a marriage to make it work it needs both parties to take responsibility and to share in the workload and in the benefits.

    For too long now Capital views itself as King, as having all the rights and all the power- however it has forgotten that it needs Labour- and has forgotten what it means to share equitably. It has grown greedier and greedier and under the pretext of ” shareholders” gouge more and more money for their already overflowing pockets, out of the mouths of the people who labour because they have families to feed. IF one looks at the reality of it… these Corporations and Qantas is now no different, are taking the food out of the mouths of the children of Australia, taking away their parents ability to provide decent education and living conditions. When viewed from this perspective I think they should be ashamed of themselves and be brought to task by stricter regulations…. for they certainly cannot be trusted to self- regulate their greed.

    As far as Alan Joyce is concerned, just look at the guy’s face, his is not the brutal, despotic CEO that he is made out to be. In many people’s opinions he is simply a ” mouthpiece” and for whom you ask??? How about the Chairman?? Yes him the guy who used to run RIO TINTO… as reported by Crikey. Now Rio Tinto is not a labour friendly corporation, in fact I would agree with others and say it is quite the opposite, who nowadays is blind enough to trust anyone connected with the elite of mining, in fact the elite of capitalism. And it is this that has finally motivated the masses to rally together and demand a change. About time too, and the Qantas Board ‘s response ie. to lock down the airline, to leave 140.000 plus people, who had paid their hard earned money to Qantas, not to mention the staff stuck all over the world, and I assume causing emotional trauma to their family; …then to my mind what Alan Joyce did should be viewed as a criminal offence. Of course it won’t be, he will get away with it and so my friends, a tsunami called Occupy Wall St is the reaction. As Einstein said for every action there is an opposite and equal reaction. For too long Corporations and not Govt’s have ruled the world (see Karven’s Book “When Corporations Rule the World 1980) and only now has the general public got wise to this. Interesting times ahead… Oh and GEEWIZZ you are either joking or a real duh duh.

  16. michael r james

    Excellent piece by Jessica Irvine today (below) and also look at the Saul Eslake article earlier (at bottom). These are hard headed economists not youthful “partying” Occupiers.

    [(theage.com.au/opinion/politics/top-bosses-riches-are-undeserved-20111101-1mttj.html)
    
Top bosses’ riches are undeserved Jessica Irvine November 2, 2011
Australian
    .
    CEOs say they must be remunerated so as not to be tempted away by jobs as international CEOs. But running a company is a tougher gig in the big, deeper pools of larger economies. Better to be a big fish in a small pond.
    .
    
CEOs also say they need to be compensated for the risks involved in running these very large companies. But what risk? Running a big bank in Australia is about as risky as running a large bureaucracy, and we don’t pay public servants anything like these guys get.
    .
    The membership of the top 10 companies in Australia is remarkably stable. These are not companies that fall over. In fact, the big four banks have an all but explicit guarantee they will not be allowed to fail.
.
Sitting in a CEO chair at the top of the ASX food chain is a great gig. These companies are simply not at risk of going under and their CEOs simply don’t deserve what they get.
    .
……..
    [(theage.com.au/business/why-some-incomes-are-just-gross-20111028-1mo9g.html)

    Why some incomes are just gross Saul Eslake October 29, 2011
.
    However the real income of the richest 1 per cent of Australian households rose by 189 per cent between 1980 and 2007 – about the same as in the US. ]

  17. ConnorJ

    [geewiz said:

    Looks like Qantas are vindicated as grounding all aircraft as a safety measure after announcing the lock-out.

    The unions are a safety and security risk.]

    From the union:

    [But the federal secretary of the Licenced Aircraft Maintenance Engineers Union, Steve Purvinas, rejected the notion that the incident was sabotage.

    It was his union’s engineer members who spotted damage to an entertainment system wiring loom as it was being fitted, he said.

    “It happened last week when some wires were found to be damaged in a wiring loom that was being fitted to a new [entertainment] system,” Mr Purvinas said.

    “The most likely situation is that these wires were damaged during manufacturing.

    “It was actually members of ours who picked it up – and reported it,” he said.

    The wiring looms normally come preassembled, Mr Purvinas said.

    “It was during the fitment of those looms that our members noticed that some wires were damaged.

    “It’s quite often that when we’re installing new wires in aircraft that looms are too short, or that pins have been put the wrong way around.

    “Any suggestion that it was sabotage from our members is clearly another attack by an airline that is leaking information to the press on purpose to take the heat off them for their actions [in grounding the airline] on the weekend,” Mr Purvinas said.

    Read more: http://www.theage.com.au/travel/travel-incidents/afp-investigates-qantas-plane-sabotage-20111102-1muxm.html#ixzz1cWNtYNky%5D

    And from QANTAS:

    [Looks like Qantas are vindicated as grounding all aircraft as a safety measure after announcing the lock-out.

    The unions are a safety and security risk.]

  18. chris.white1@internode.on.net

    Bernard again makes telling points. As a former union official I not only have argued against the severe repression of the right to strike by corporations from Howard in WorkChoices and retained by Gillard in Fair Work Australia, but also I urge reviving the strike weapon here http://chriswhiteonline.org/2011/10/on-strikes-and-their-revival/

    The employer lock-out weapon ought not to be allowed in the Fair Work Act.
    The lock-out should be banned to allow some fairness and balance for emploees against the more powerful corporations in our collective bargaining system.

    

Qantas is a case study. The lockout with no notice in response to the limited and responsible protected action by the members of the three Qantas unions should in the public interest be unlawful. 

http://chriswhiteonline.org/2011/10/the-lock-out-to-go/

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