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The Government Is Targeting Unions When They Should Really Be Worried About Your Pay Packet

In this lopsided contest between workers and employers, workers need all the help they can get.

16/11/2017 10:24 AM AEDT | Updated 16/11/2017 10:24 AM AEDT
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Australia's Prime Minister Malcolm Turnbull speaks at a press conference with the minister for Employment Michaelia Cash.

To the casual observer, this seems an odd time for the Commonwealth government to rush forward new legislation curbing the power of unions. After all, the Coalition has other things on its plate: not least its very survival in the wake of the citizenship crisis.

Nevertheless, the government has picked this moment to advance not one but five pieces of legislation -- broad in scope, but consistent in target. All would further constrain the actions, and undermine the social legitimacy, of trade unions.

One bill would tighten government control over welfare and training funds which unions have negotiated with employers for decades. Another gives government power to block union mergers and even veto certain individuals from holding elected union positions.

The others would limit unions' role in funding and managing industry superannuation funds, while enhancing freedom and opportunities for bank-managed super funds. All would add to a pervasive web of union restrictions that are already among the most intrusive of any industrial country.

The transformation of work from permanent jobs to insecure "gigs" further undermines the ability of workers to demand, and receive, higher pay.

On second thought, perhaps the timing does make sense -- at least from the perspective of a government desperate to change the channel. Never mind that we don't know who in Parliament can even vote on forthcoming legislation. Never mind the self-inflicted wounds still festering from Employment Minister Michaelia Cash's office involvement in police raids of union offices that brought to mind a banana republic not an advanced democracy. If invoking the spectre of unionists gone wild helps a beleaguered government turn the page, they will give it a go.

This theme in the Coalition's politics is long-standing, but has not been especially successful. After all, Malcolm Turnbull sent the country to a double-dissolution election purportedly motivated by commitment to new restrictions on unions (including a reincarnated ABCC and a new Registered Organisations Commission). That move delivered the current chaotic Parliament. Nevertheless, the government is trying it again.

Yet the more aggressive its attacks on the union movement become, the further the government sinks in the polls. And the failure of its scapegoating strategy does not solely reflect errors in political judgment. There are also hard economics at the core of the exhaustion of the Coalition's anti-union rhetoric. The sheer dissonance between government claims that unions are too powerful and the grim economic reality faced by Australia's battlers (whether union members or not) is simply too gaping for this narrative to win public acceptance.

For example, Australian wages are inching along at the slowest pace of any non-recession period in postwar history. New data from the Australian Bureau of Statistics confirmed annual hourly wage growth is stuck at 2 percent (and even slower in the private sector), belying predictions of Treasurer Scott Morrison and RBA Governor Phillip Lowe that better "supply and demand" conditions will light a fire under wages. They ignore the structural and institutional factors behind stagnant wages, and the increasingly irrelevance of the official unemployment rate in a labour market dominated by casual jobs, part-time work, and gigs.

In fact, hourly wage trends understate the true weakness in labour incomes, precisely because they miss the wage-suppressing effects of insecure and casual jobs, as well as the fact that many workers can't get enough hours of work (on top of low hourly pay). Broader wage measures paint a bleaker picture. Data on labour compensation per hour of work (from the GDP accounts) suggest nominal wages actually fell 0.5 percent over the past year -- the worst showing since World War II.

Many other indicators confirm workers need more power, not less, and hence that the government's anti-union crusade is fundamentally misplaced. The share of GDP paid to workers fell to its lowest point since the ABS began collecting the data.

Minimum wages are one-quarter lower than 30 years ago, relative to overall wages. Union membership is down to 13 percent of total employment, in large part because of decades of unremitting legislative hostility. Enterprise agreement coverage is collapsing in the private sector, down 25 percent since 2013. The transformation of work from permanent jobs to insecure "gigs" further undermines the ability of workers to demand, and receive, higher pay.

In this lopsided contest between workers and employers, workers need all the help they can get. The power of collective representation is one of the most important tools in their toolbox. It's no accident that unions and collective bargaining have been the primary target of business-friendly labour law changes over the last generation. But the legacy of that crusade is the stagnation and growing inequality of wages. Most Australians are suffering because of it. And that's why they're turning a blind eye to the Coalition's effort to rouse yet another anti-union witch-hunt.

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