WorkChoices - whose side are you on?

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!)

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.

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.

And in my book the long-term unemployment visited upon those who lose heart in the labour market is far more devastating, to themselves their families and communities, than some belt tightening by workers on minimum wages.

Tricky isn’t it?

Is there a better way? Well yes, there is. We nibble away at a better approach with other policies - like retraining, job subsidies and family tax supplements - to raise worker skills, create entry level jobs and make them more attractive than the dole.

But for these policies to really work to mop up the collateral damage from stronger industrial relations regulation - as they do for instance in Scandinavia - they need to aggressively fund them.

We don’t do that. Never have.

So even though Paul Keating’s “Job Compact” - which guaranteed the unemployed training or a job - and John Howard’s “Work for the Dole” came with the usual advertisements to make us feel all shiny and new, they’ve always been crippled by under-funding.

The cost of the “Job Compact” was contained by restricting it to those who’d rotted on the dole for at least 18 months. And "Work for the Dole" was always at least as much a symbol in the ongoing culture war as it was a piece of economic or social policy. The government spends around twice as much on sport.

But don’t fall for the line that with falling unemployment the problem is solving itself. Since 1970, and despite the last 15 years of solid growth, the proportion of working age men without full-time work has nearly tripled - to over a million. (Citing men tells us more because many women prefer part-time work). They’re on the dole, disability payments or in part-time work. And most of them are unskilled.

That astonishing change is driven by the relentless march of cost-saving technology. Think word processors, Internet banking and big, big machines that lay roads and dig tunnels, with just a few people feeding in fuel and materials. And there’s globalisation. Our imports of manufactures are labour intensive while our mineral and agricultural exports are capital, resource and skill intensive.

For ten years the government’s priorities have focused on tax cuts - with increasing emphasis on those with healthy incomes - rather than subsidising job creation and reducing the “effective marginal tax rates” of 60 per cent plus created by benefits being withdrawn as people move from welfare to work.

So while we enjoy the politics of taking sides for or against the IR changes, just remember how few friends those priced out of the labour market really have.

Then decide whether you support or oppose the IR changes as best you can.