Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

WorkChoices is valid - now we can get back to work

By Mirko Bagaric - posted Thursday, 16 November 2006


To the surprise of not a single informed lawyer in the county, the High Court announced yesterday that the Howard Government’s WorkChoices legislation is constitutionally valid.

With that red herring out of the way, the government and the community can now better assess the merits of the legislation (which came into effect about six months ago). Their focus will be sharpened by next year’s Federal election which will largely turn on the merits of the most fundamental changes to Australia’s industrial relations system for over a century.

The legislation was passed against the backdrop of howls of protests by the union movement and other Australians who were concerned about the prospect of mass sackings.

Advertisement

In a pre-election pitch, Labor Federal leader Kim Beazley boldly declared that his first act as prime minister would be to rip up the legislation on the steps of Parliament. He was probably fuelled by the hundreds of thousands of people who protested around Australia against the supposedly worker-exploiting legislation.

Sometimes six months is a long time. The alarmist concerns peddled by the Union movement and Labor have not occurred. Australia has not become the land of mass sackings or the working poor.

In fact since the passing of the legislation, Australia’s unemployment rate has dropped to a 30-year low and wages have kept par with inflation. A teeny weeny unemployment rate of 4.6 per cent effectively means that nearly every person that wants a job can get one.

Despite this, the jury is still out on the wisdom of the legislation. The free market employment ideology that underpins the industrial relations changes is invoked by the United States, which is the most economically powerful nation of earth. Workers in the US get paid about 25 per cent more than Australians. At the same time, the US also enjoys healthy economic growth (about 3 per cent) and low unemployment (under 5 per cent).

At the other extreme is France, where government regulation of the employment relationship is so tight that even maximum working hours are regulated and it is virtually impossible to get sacked. France is an economic basket case. Unemployment is around 10 per cent and its GDP growth rate is a sluggish 2 per cent.

Ultimately, the economic well-being on a nation depends on a number of complex variables and employment conditions are only one aspect of the puzzle. There are a lot of economists in the US and France with big brains and they have been unable to determine where the “real” truth lies in relation to the best economic employment model.

Advertisement

US economists are probably confused by Sweden, which demonstrates that highly regulated labour conditions and economic prosperity can co-exist. The Swedes enjoy an unemployment rate of about 5 per cent and a healthy GDP growth rate of nearly 4 per cent.

Thus, from the ideology and economic management perspective, the desirability of the industrial relations changes remains unclear. There is no knock down argument for or against the Howard IR laws.

What is clear from the micro perspective, however, is that by giving bosses more power to hire and fire workers, employees will have less bargaining power to negotiate higher wages. It is assumed that the extra profitability and flexibility for employers will result in them hiring more people.

Thus, it is reasonable to expect that the changes will result in lower wages but more people actually having jobs.

The second part of this prediction is already playing out, but employers have not yet pegged back the pay packets of workers. The explanation for this is the skills and labour shortage currently in Australia. Bosses can’t decrease most of our wages because we are now a scarce resource. But some workers might find their wage packet thinning when the economy slows.

In any event, the likely long term effect of the legislation will see more people in jobs, but taking home less money. Is this preferable to a situation where there are fewer people employed but earning more money?

This is contestable. But what is not contestable is that Labor and the unions overcooked their attacks on the laws. The changes don’t take back workers' rights and conditions to the 19th century and the skies have not fallen in.

The irony surrounding the legislation is that having cried wolf so loudly about the WorkChoices legislation, it might be the credibility of Labor that is diminished at next year’s Federal election.

  1. Pages:
  2. 1
  3. 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

9 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Mirko Bagaric, BA LLB(Hons) LLM PhD (Monash), is a Croatian born Australian based author and lawyer who writes on law and moral and political philosophy. He is dean of law at Swinburne University and author of Australian Human Rights Law.

Other articles by this Author

All articles by Mirko Bagaric

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Mirko Bagaric
Article Tools
Comment 9 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy