Federal

Jan 31, 2018

Shorten wage growth strategy is smarter, more traditional than it looks

Labor has thrown down the gauntlet to employers, in effect saying if they want to return to centralised wage-fixing then that can be used to lift wages.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

Bill Shorten's proposed two-part strategy for dealing with stagnant wages growth, outlined yesterday at the Press Club, has already elicited the now proforma cries of "war on business" but isn't especially radical. Shorten proposed a pincer movement, if you like -- an increase in the minimum wage closer to a "living wage", and an end to an increasingly favoured tactic of employers -- resolving industrial disputes by terminating enterprise agreements and letting workers fall back down to award "safety net" rates.

Remember that enterprise bargaining was introduced by the Keating government with the support of the ACTU, over a distinct lack of enthusiasm from the then-Industrial Relations Commission and employers. It was entirely consistent with neoliberal logic that said wages should not be made at a national level -- as they were until then via the awards system -- but decentralised so that employers and employees could negotiate wages and conditions at the workplace level, with awards staying as a safety net. IR hardliners wanted to take that logic all the way to individual agreements, happily ignoring that few workers had the bargaining power to negotiate fairly with even small employers -- as bitter experience under Workchoices showed.

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6 comments

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6 thoughts on “Shorten wage growth strategy is smarter, more traditional than it looks

  1. brian crooks

    A lift in the minimum wage to a cost of living sustainable level would cost employers nothing as the extra income would be immediately spent in the economy and generate quick consumer spending growth that then translates into increased demand for business and increased profits generating more business tax tax payment, in fact a win for all, including the economically stupid turnbull government

  2. bref

    While political parties and corporate bosses sit cosily on their wealthy laurels, I wait in vain (so far) for the millennials to become so angry they’ll flout the new laws against striking and other methods of protest. But the inequity in our society is becoming so great that its only a matter of time. As our grandfathers came to realise it is literally the only language those in power understand.

  3. kyle Hargraves

    On the one hand Shorten does seem to be doing his job. On the other hand it is all very well to paraphrase the ills of the economy as they pertain to labour (or employees) but there has to be a definitive strategy to correct the state of affairs and, of course, the strategy needs to be rather robust. Ditto for the (so called) Integrity Commission(?); post-precedents to Orwell’s Ministry of Truth(?).

    Let’s give the guy a go but I suggest that the Leader of the Opposition ought to have a fairly clear and comprehensive policy (which, inter alia, identifies, at some length, the need for the changes in the first place) by (say) the end of March.

    As to the minimum wage the UK has stats that monitor the change in employment, for those affected, in respect of changes to the minimum wage. The simple-minded “supply & demand” analysis does reflect (and imply) a reduction of those employed as the minimum wage increases. The more complex considerations concern the implications of this arm-chair albeit orthodox view.

    Nowhere, to the best of my knowledge, has either the demand or the supply curves for labour been plotted with empirical data; the equilibrium price of labour (of any kind) in any country or province or state within a country is unknown. The Mayor of Mount Isa (to pick a location at random) has no more of an idea of the equilibrium (aggregated) wage that has the Treasurer
    or indeed anyone in the Treasury. In this respect the “analysis” from the point of view of supply and demand is rather an idealised fiction at best.

    If minimum wages caused unemployment or job losses then those entering the work force from a given date would never find jobs (according to the above (cough) “theory”. However, in every economy more people are being employed over any interval of time. There is unemployment but except for the recession in 2008 in (e.g. the UK and the USA) the unemployment rate has been relatively constant and has NOT increased with the percentage of people who are eligible to enter the work force – at whatever skill level – (as would be observed if the theory was correct). Therefore, the argument that minimum wages causes unemployment is not creditable. Enough said – or does someone wish for more ?

    1. brian crooks

      trickle down economics has destroyed the U.S middle class and is well on the way to doing the same thing in the U.K and Scotland will leave Britain at the first opportunity as they know they are on a sinking ship.

  4. brian crooks

    shorten is on a winner and turdball knows it, you can fool some for some of the time but, is the old standby and very relevant here and now, the intelligent voters are awake to the coalition bullshit and will throw them out come polling day, have a look at the sports bet odds for labor that tells the story.

  5. brian crooks

    the more workers earn the more they spend, this increases demand for products and services which increases employment, more wage earners mean more demand and more personal and business tax receipts to the government and more GST revenue for the states which creates more infrastructure spending which creates more jobs and on it goes, thats a successful economy, the coalition economy of wage starvation means less spending less tax receipts less infrastructure and a recessive economy, always remember that the rich love recessions, they can buy shares,business, and property at bargain prices, they have the power to induce recessions and to revive an economy to sell their ill gotten recession acquired benefits at big profits, how many yanks lost their homes in the GFC to the benefit of the greedy rich after the crash recovery.

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