Work choices

In a guest post at Blogocracy, one of the authors, Brigid van Wanrooy, of the Australia@Work study that the government sadly politicised, wrote:

So far, I have only seen one real attempt to engage with the Australia at Work research findings. Sinclair Davidson and Alex Robson have no problem with our finding that low qualified employees on AWAs have lower average full-time wages than those who collectively bargain at the workplace; indeed they believe that lower wages will reduce unemployment.

Ignoring, for a moment, the extraordinary simplicity of this analysis, they raise an important question: is the purpose of WorkChoices to lower wages to build an army of low-paid workers?

If it is, Australians have the right to know.

What else would have the objectives of Work Choices have been? As I understand it (and I have to admit my understanding is probably limited), Work Choices removed things that allowed workers collective powers (for instance, I have written before about leave entitlements). So that would mean that previously, works could extract those benefits from employers while afterwards they would go away. Broadly speaking, existing wages and salaries should fall although possibly over a larger number of employed. Regardless, average earnings would fall. The study finds this and also that Unions add value to their members (I would be worried if they didn’t; after all, how many Union workers are on award wages? My guess is none and a good thing too).

So the fact that the government obscures this implication is hardly surprising. This happens all of the time when there are distributional affects of policy. The key issue is: where there really enough people made better off from AWAs being present to compensate for those who were made worse off? The current study doesn’t examine this (I think) but the next election will.

One thought on “Work choices”

  1. In principle all employment conditions should be negotiable but this requires three things:

    (a) reasonable equality of negotiating power
    (b) general acceptance of a benchmark of what is a fair deal
    (c) a simple and cost-effective process.

    AWAs as currently constituted seem to erode the first two of those and if they don’t, the third one may become a serious problem.

    There is sense behind breaking much of the prescriptive nonsense that accumulated around the traditional award system but it has gone too far – even worse, it has become incredibly complicated, as shown by the recent rejection of thousands of AWAs as being unacceptable.

    We seem to have been lumbered with a system that would suit a small garage proprietor in a Sydney suburb like Dulwich Hill in the first half of last century, enabling him to get rid of the odd bolshie mechanic and stop the union from interfering, but it doesn’t seem right for the first half of the 21st century.


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