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Capital and labour

This is a personal view of some of the issues involving the power of the unions and the protections that they offer and I am writing from my own experience rather than research. I am sure there are others who might savagely critique the opinions I express but this essay was triggered by the apparent inability of the RBA to understand why wages have stagnated.

I started teaching in the UK in 1957, and, by the early 1960s, thanks to continuous campaigning, women in the teaching profession became eligible to the same pay and conditions as male teachers with the same qualifications. The actual pay scales were determined by the government-established Burnham Committee and applied to all teachers in England and Wales so teachers joined professional associations rather than unions.

In my last months in England, there were major rolling power blackouts while the unions fought with the government – and did not always win!

When I came to Australia in 1971, I was only involved in part-time and casual teaching until 1984, when I returned to full-time work as a maths teacher. I joined the AEU soon after, and, when I moved to the tertiary sector in 1989, I transferred to the NTEU. When enterprise bargaining was introduced, I was involved in many union meetings over the pay structure. I was also very grateful for help from the union when my employer insisted that I had to retire on the eve of my 65th birthday, because they were – illegally as it transpired – running two retirement policies, the first of which should have been cancelled following the Commonwealth Anti-Discrimination Act – and I was able to negotiate a continuity of employment and retain my membership of CSS.

Over the years, the trades unions have won many benefits for all workers, not least of which are the 40-hour week, holiday pay, sick leave and a multitude of others – all now taken for granted by full-time employees.

The unions were formed in the first instance over a century ago to enable the workers to gain some power over capital, best exemplified in the right to withhold labour.

The tension between capital and labour has almost always been more intense when a conservative government is in power, and legislative changes made while John Howard was PM totally changed the balance of power.

Initially enterprise bargaining relied on relating wage increases to productivity – which is a commodity not readily quantified in many industry settings.

Because of the benefits which the unions had won, many employees saw no point in paying union dues so the power of the unions was weakened, while pressure by employers on governments intensified!

Labour laws now severely restrict the right to strike – the most powerful weapon in the unions’ armoury – and low union membership in some employment areas means that striking is not necessarily supported by sufficient employees.

Plus, conservative governments forever work on improving the divide and rule principle!

In recent years, it is clear from increased profits that productivity has significantly increased. But there is no longer a nexus between increased productivity and wage increases. The beneficiaries of the increase are shareholders, whose dividends increase at the expense of wage earners.

As if this was not enough, there are several other issues with negative impact on employees. Conservative governments are averse to regulation – a fact clearly revealed in the Banking RC – and there is inadequate supervision of many aspects of employment, including the timely payments of the superannuation levy for employees’ superannuation contributions into the nominated funds. Employers benefit by earning interest on the funds withheld, while the employee suffers significant loss, since superannuation relies on the compounding of interest over time.

The 7-Eleven scandal highlighted another situation where employees were treated disgustingly with no oversight of how the system was working. This is a continuing problem, especially for overseas students.

Another issue of concern has been the proliferation of labour-hire agencies. It is common practice for mining companies, needing labour for routine site maintenance, to use a labour-hire company.

Those who gain work this way are not always paid superannuation for all hours worked, nor paid for travel time, and their booking can be cancelled at short notice while any criticism will mean they receive no more offers. Naturally, the amount paid by the mining company is not paid in full to the individual engaged by the labour-hire firm.

All of this illustrates only too clearly how a large part of the labour force is totally without any power in the employment area and those engaged by labour-hire firms are not even eligible to belong to a union.

The dice is now so heavily loaded against labour that capital is laughing all the way to the bank!

And the RBA wonders why wages have flat-lined!

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  1. Jack Cade

    I have always supported unions, and have always been a member of whatever union my employment involved. I have also seen the ugly side of unions (although I still maintained my membership and still thought unions were essential.
    My first job was with a company in the UK, one of those old-style companies that were paternalistic. Provided housing for employees, built schools, provided social
    clubs for employees, encouraged union membership and paid union fees, sent employees to self-improvement classes. My father worked there (just a labourer) and I was offered a job for that reason. As far as I know ( and I was only a boy at the time) nobody ever left the company unless they had a superb job to go to.
    I also worked for a short time in a company with a militant union. One of my colleagues was a migrant from India, and the employer decided to do a work place time and motion study on the shop floor.
    The union called a strike because they were not going to stand by and watch a ‘black man’ standing over their members with a stop watch.
    The Indian man lived near me, and I often walked to work with him. A shop steward told me that it was not in my best interests to ‘fraternise’ with someone who was classed as a scab.
    Luckily for me, inclement weather meant that I had to catch the bus to work, maybe a mile or so, for the duration of the strike.
    The workforce in that factory was completely out of control. Its products were mainly exported to African countries and machinists did what they felt in the mood to make, sod what particular part was needed in Nigeria.
    Work was plentiful at that time, but that was in the sixties. Thatcher put an end to both the unions; and the employers, as it happened.

  2. Dr Tristan Ewins

    In Marx’s time socialists supposed the mutual association of the workers would lead to the end of capitalism – and of exploitation. Today there is casualisation and ‘the Gig economy’. Unions must fight for the right to withdraw labour ; and even to Secondary Boycott. If industrially strong workers can stand in solidarity with the industrially weak then the movement as a whole can deliver to its members. If necessarily we must be willing to fight so that anti-worker legislation is rendered ‘the dead letter of the law’. Industrial action can also involve holding a picket line. This will be depicted as ‘union thuggery’. The labour movement needs to reach out to the broad community to demonstrate that sometimes there is little other option for workers fighting for their rights.

  3. Ill fares the land

    It never ceases to amaze me how readily people will believe the lies spun by conservatives about a range of things, including unions. According to conservatives, unions do nothing but impede business. For the rabid conservative and free-marketeers, labour is a resource and should operate under the forces of a free-market.

    Of course, the assumption is that the market is both free and fair and that is where the whole labour-pricing process falls down. Unions, according to the myopic fools in the IPA and the rest of the right-wing think tanks (who epitomose the notion of the intelligent idiot and have all been on a decades-long campaign to reduce the impact of unions, or more specifically, collective wage bargaining), distort the free market and so keep wages artificially high.

    The fly-in-the-ointment is that when union power is reduced, the labour market remains distorted (with the collusion of governments; introducing as they do things like Work Choices), but the power shifts to employers, who then rejoice in the lack of employee bargaining power and then use that lack of employee power to drive down wages and conditions. Moreover, those same employers then continue to ask for even greater workforce “flexibility” – code for driving down wages and conditions even further.

    Unions have not always behaved with aplomb and some have been thugs, at best. On the other hand, when you look at the building industry, the building companies, especially the larger builders are thugs and that only results in the labour movement need to respond with thuggery – to my mind it is no coincidence that Setka is physically imposing. Of course, one only ever hears about union thuggery, never employer thuggery.

    The drop in wages and working conditions has been happening for a long time now, but it is only now becoming more evident as the economy falters. But it is clear that workers have offered up increases in productivity and cuts to real wages and working conditions, but the benefits have been taken by employers as higher profits and not given back. And with a government that can best be descibed as corrupted and incompetent (the worst description is probably unprintable), it will continue to be employers who dictate what happens in the employment market and that will be to the detriment of workers. The labour market will continue to be distorted in favour of employers. Of course, our nincompoop LNP will insist that only tax cuts can restore economic growth, but we have had a long, long period of economic growth and workers, on the whole, have been missing out.

  4. Rosemary J36

    I know it is dangerous to generalise, but in my experience racism often arises from a prejudiced upbringing and having a limited number of regular contacts. Similarly, having nearly every acquaintance in the same ‘class’ – for want of a better word – sees ‘difference’ as untrustworthy. Sad.

  5. Jennifer Demas


    The then US President Teddy Roosevelt, “It is essential that there be organisation of labour. This is an era of organisation of capital and therefore labour must organise” and by the time Woodrow Wilson “The government, which was designed for the people, has got into the hands of bosses and their employers, the special interests. An invisible empire has been set up above the forms of democracy” as organised labour was/has been well and truly snookered. The invisible empire decided the how and the 4th estate folded like a snot filled tissue at the acquiesce of the invisible empire and the rest is history and would you believe over there the invisible empire is not half as indentured toxic or divisive and prejudices as over here, well until a certain media tsar came to set up camp. Over here, the attack on organised labour by the invisible empire has been relentless, toxic, scaremonger, divisive and prejudiced to the nth and Australia they’re not done yet more still to come.

    Furthermore, not only does the invisible empire decide the who, what and how, they also see it as their prerogative to decide which century for Australia, recall the relentless toxic, divisive, scaremongering and the prejudices and as the 4th estate at edict of the invisible empire, folded like the proverbial snot filled tissue and Australia well and truly snookered out of any semblance of a 21st century, today no digitisation, no price on carbon and no educating for the 21st century as they also came after all the hard fought gains that made for an equal fair and civil society. So does anybody really still believe that the media tsar hoovered up print, screen, radio and not bull horn brand democracy of, for and by the invisible empire really?. It’s up to this generation to protect what’s left of the hard fought gains that made for an equal, fair and civil society and any semblance of an open informed, equal and fair democracy, before it’s way way way too late if not for us, how about for future generations, hook up Australia get connected, viva organised labour viva ACTU.

  6. Stephengb

    Rosemary J36

    A very concise assement of reality

  7. Jon Chesterson

    Society has become so exploitative, selfish and depressing.

  8. John Lavery

    in another day and another age, Murdoch and his like would have faced the firing squad.

  9. John Lord

    Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.


  10. Phil

    John Lavery – that would be nice, can I get tickets?

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