The campaign by The Australian newspaper against the Fair Work Act has had a few phases. I’d like to go through a few of their key claims and evaluate them against recent data.
A discussion of Australian political and economic issues and ideas, by Matt Cowgill.
Archives for posts with tag: industrial relations
[A]dopting an incomes policy was like jumping out of a second storey window: nobody in his right mind would do it unless the stairs were on fire… The stairs were aflame in Australia in 1983, when the Hawke Government won office. -Peter Cook.
The Accord is back in fashion. The past few months have seen a lot of pining for the “Hawke-Keating model,” particularly the compact between the two wings of the labour movement. A lot of the discussion seems to me to lack a sense of what made the Accord necessary (in the eyes of the protagonists), what made the Accord possible, and the ways in which our current circumstances differ from those of 1983.
How would we know if the labour market was ‘flexible’? One way is to look at how the jobs market responds to economic shocks. During the GFC, when the Howard Government’s labour laws were still in effect, the number of hours worked in Australia fell while the number of people in employment didn’t fall.
At 11:30 this morning, the ABS published the Australian national accounts for the March quarter of this year. Among other things, they show that the rate of productivity growth has surged – in the past year, labour productivity in the market sector grew at its fastest pace in over a decade. I’m sure this will be a major focus of the news coverage tomorrow, just as the disappointing productivity numbers were closely examined in early 2011. Just in case The Australian doesn’t choose to highlight the issue, here’s a handy chart for your reference:
Labour productivity in the market sector – year ended growth
Source: Calculations based on ABS 5206, table 1.
While it’s true that you should be careful about drawing too many conclusions from the quarterly productivity data, that was just as true this time last year when various pundits leapt on the data to suggest that the Fair Work Act has damaged Australia’s productivity performance.
Economists usually think that people’s revealed preferences (what they do) are more important than their stated preferences (what they say they’ll do). With that in mind, let’s consider George Calombaris’ claim that the minimum wages he has to pay his staff on Sundays make it uneconomical to open his restaurant(s). Is it true? Well, he claims that it is uneconomical to open on Sundays, yet he nevertheless opens on Sundays. Why would he do that if it were true that his costs exceeded his revenue?
Grace Collier, union official turned employer-side industrial relations consultant, had a column in yesterday’s edition of The Australian. I found it quite offensive. Here’s a snippet:
I told myself I wouldn’t write about the Fair Work Act for a while. I told myself this partly because it’s a topic I’ve done to death in recent weeks and months, and partly because no amount of factual analysis will dissuade the ideological warriors of the right from blaming the Act for all the nation’s economic ills, both real and imagined.
I told myself I’d lay off, but I can’t resist responding to Michael Stutchbury’s piece in today’s edition of The Australian.
This blog represents my personal views, and not necessarily those of my employer, the ACTU.
Nevertheless, there is a fair amount of crossover between the things I write about on this blog and the things I write about for work. Given this crossover, I thought some readers might be interested in this piece I wrote for the ACTU’s Rights at Work blog (re-posted at The Drum).
The post was written in response to a front page article in Monday’s edition of The Australian, in which some retailers and retail associations made a few claims about the state of their industry, and blamed their alleged woes on the IR system and minimum wages. As you might imagine, I don’t agree with their diagnosis.
