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WorkChoices - whose side are you on?

By Nicholas Gruen - posted Friday, 21 October 2005


The government’s new WorkChoices package of IR reform will allow workers to negotiate away a range of entitlements. It will make collective bargaining more difficult.  And minimum wages will probably increase more slowly.

So whose side are you on?

The problem is the two sides of the debate don’t want you to know much about the other side of the story. (In fact one side doesn’t really want you to know much about their own side of the story!)

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Of course the conservatives - the unions and the ALP - have no trouble telling you what’s bad - the package will eat away at the pay and conditions of lower paid workers.

But the radicals - the government - can’t come clean and tell you what’s good about them. Because to do so would involve first, frankly accepting that the conservatives claims are true (if routinely exaggerated) then explaining what might be good about that (I’ll tell you that in a sec).

Instead they’re working from the George Orwell manual of public relations.

Step One: Spend tens of millions of your dollars on political advertisements for policies which are still being refined and have not even been properly specified in draft legislation.

Step Two: Remember those chains that burst asunder as the GST gave us mountains of new paperwork? Be similarly bold. Advertise this stripping away of working conditions as a raft of new “fairer” protections for workers. “Protected by law”.

So what can be said for undermining existing protections for workers? Actually quite a lot.

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Surprisingly enough low paid jobs are spread almost evenly through our households, from Redfern and Ipswich to Hamilton and Double Bay. Many low paid workers are young and will be promoted into better jobs. Others have partners who are doing fine. Some are “doctor's wives” picking up some spare cash when it doesn’t conflict with tennis parties.

Now most economists think that job creation will respond fairly sluggishly to minimum wage falls - but we're not sure. And if you cut too far, the dole becomes more attractive than work.

On the other hand minimum wages and conditions are relatively high compared with similar countries. And alarming numbers of workers are simply unable to hold down jobs at those wages and settle for benefits.

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First published in The Courier-Mail on October 19, 2005.



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About the Author

Dr Nicholas Gruen is CEO of Lateral Economics and Chairman of Peach Refund Mortgage Broker. He is working on a book entitled Reimagining Economic Reform.

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