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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