The ongoing debate over the federal government’s proposed industrial relations laws is being frustrated with an “everyone wants to go to heaven, but no one wants to die” type of thinking. Everyone wants wages to go up (or says they do). But an uptick in strike action? That’s a head-shaking no-no-no.
Bad luck. Both economics and history tell us you can’t have one without the other, no matter how hard the balance-of-power-bearing independents in the Senate hope they can square that problematic wages-up/strikes-down circle.
It’s the reverse that’s true: higher wages and more strikes — or, at least, more rights to strike — go hand in hand. A stronger right to strike is critical in making lives better for working Australians, giving them more confidence in their workplace and more money in their pockets.
The industrial legislation is an attempt to flip Australia’s near decade-long real wages slide, with the first tentative steps to reverse 30 years of increasingly onerous legislated restraints on industrial action.
The new laws will allow workers to campaign and negotiate for sector-wide agreements applying across employers with so-called multi-employer agreements. It’s a power shift — by design — to give workers the ability to organise at scale.
As we’ve known since Keynes ally Joan Robinson pointed out the bleedin’ obvious that the market for labour is inherently unfair. Technically, it’s a monopsony. That is, there are a lot fewer buyers (employers) than there are sellers (all the rest of us). Few buyers? Lots of sellers? That’s power right there.
As conservative governments and employer groups have been lending their arm to the monopsonist strength, labour’s share of the cake has diminished (as it does when real wages fall) while capital’s share has been expanding through multimillion-dollar salaries of senior managers and rising profits.
But along with backing up the right to bargain in sectors comes the right to go on strike. By changing the workplace balance of power, there are hopes of changing the bargaining psychology. It’s a bit like Dashiell Hammett (kinda, sorta) has Sam Spade say in The Maltese Falcon: other forms of persuasion are not much good unless the threat of a strike is behind them.
Conservative governments have been working to pull the sting of that threat since the 1950s — and unions have been pushing back. The Menzies government’s penal provisions in the Conciliation and Arbitration Act were broken by the strikes in response to the jailing of tramways leader Clarrie O’Shea in 1969.
Cause, effect? The victory over the penal provisions helped inspire the wages breakout of the early 1970s, which pushed labour’s share of income to a high of more than 60%.
The Fraser government responded with laws outlawing political strikes (like the early 1970s green bans) and sympathy strikes (encouraged, as it happened, by the support given to the printers’ strike at The Sydney Morning Herald). It followed these secondary boycott bans with an attempted wage freeze in the depths of the early 1980s recession.
Under the Hawke government, employers used the courts to resuscitate common law restrictions on strikes. (It was in the action involving Dollar Sweets that Howard’s treasurer and now-Nine chair Peter Costello made his mark.)
The Keating government replied with the first laws that made certain strikes legal in some circumstances as part of its enterprise bargaining package. The Howard government strangled these already limited rights with ever more restraining regulation. Abbott took it further.
In the Media Entertainment and Arts Alliance, I saw firsthand how, in the face of these moves, retaining the ability to bargain by sector was essential to retaining strength in the arts and entertainment industry.
Now, Labor hopes to extend rights again by enabling action across employers. It’s a small step, but enough to have Australia’s employer groups (and their political allies in the Liberal and National parties) huffing and puffing over a back to the ’70s strike-led wages outbreak. (Mark it unlikely.)
They’re lobbying to gut the multi-employer bargaining rights with not one but two ideas specifically tailored to appeal to the independents.
First: win time. Too complex, they say. Too hard to decide. Let’s just split the bill and put off the sectoral bargaining rights to give it more thought (and give employers time to roll out their anti-mining, tax-style campaign).
Second: fence it off. Restrict it to even more powerless low-income sectors or exempt most workers with a radical redefinition of small businesses. In short, create a right that becomes effectively unusable to push up wages.
There’s no guarantee a better right to strike will push up wages. Unions will still need on-the-ground organising and campaigning to turn the right into power. But without better rights, we can guarantee real wages will continue to slide.
It is not just that some people, chiefly Business and their advocates, fear that strikes will increase in line with multi-employer bargaining. it is that these businesses will have to pay more. They really don’t want to do that even though Business profit share has risen by over 28% in one year and wages has risen less than 2%. No wonder they are taking out full page ads in their Press “allied” dailies.
I don’t trust someone like Pocock and he if does the right thing it will be a miracle. The 10-15% he talks about is the most important part of the legislation. Without the right to multi-employer bargaining, and it should be fewer than 15 employees per enterprise by the way, without the right to multi-employer bargaining you may as well have no legislation.
Yes the ‘çommon law’ right to strike and not to strike. This was the triumph of the Liberals and conservatives during their wilderness years out of office from 1983-1996. They didn’t need Parliament. Labor did all the dirty work for them with their cowardly, traitorous Accord and low wage increases, similar to what happened under the Liberals from 2014-2022. Common law is always contestable. The conservatives and business class broadly speaking won that conflict by effectively outlawing strikes. Without a Bill of Rights and an enshrined right to strike the balance between Labour and Capital will always be an unequal one because of the reasons you described – a monopsony of few buyers (employers) and many sellers (labour).
Correct. While business has the right to lockout and organise against workers conditions, including by capturing governments, workers must at least have the right to strike. For too long now workers productivity gains have benefotted only business. Nothing for the workers. If they wont share voluntarily then it has to be the other way.
Fantastic article, Christopher! What a pity it will only be read by us lucky enough to be Crikey subscribers. All true and easy to understand.
This is the classic example of what happens to GOOD legislation when some Independent members/senators…who get almost NO votes…suddenly have the power to stop the majority of workers getting a fair deal on wages. IMHO, that should be ALL workers getting said fair deal…not this nonsense of ‘more than 15 per business’, which I feel sure was only included by Labor in an attempt to get the legislation passed.
As far as the so-called anti-IR legislation campaign to be conducted by business, I think PM Albanese was correct when he said that if business has the money to mount such a campaign, then surely they have the money to pay decent wages!
If this legislation does not pass the Senate, then we will all know who to blame…any and all ‘Independent and small party’ senators. You know…those mentioned above who get very few votes yet seek to dominate our democracy. Totally undemocratic, as far as I’m concerned!!!!
Forgot to add that workers in most OECD countries have the right to withdraw their labour…that is to go on strike. What is wrong with our country that we refuse to allow workers to have what is, basically, a universal human right?
If business had any idea of what a fair go meant, there need not be any strikes. But of course it is all the worker’s fault when they have to resort to strike action…NOT too much power in business hands, perhaps? The very situation that this IR legislation, currently in the Senate, seeks to fix!
A lot of workers voted for the LNP then, and still do. UNBELIEVABLE.
I don’t think business believes all the strike hysteria. I think it just figured out that its going to have to cough up for wage increases and it doesn’t want to share any productivity gains. This was always going to happen once the rubber hit the road. The adversarial approach is just too entrenched.