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Fair Work, fair pay and skivers

By Don Allan - posted Thursday, 16 April 2009

Rightly, WorkChoices has been consigned to the dustbin of industrial relations history. However, according to some employers its replacement, the Fair Work Australia Act, will be a boon to “skivers” - a Scots word for people who don’t pull their weight.

But just as WorkChoices was wrong (a business with 100 employees is not a small business) so too is the Fair Work Australia limit of 15 employees (30 would have been better). Indeed in the current tight employment market, sensible members of the union movement will now find themselves in the position of being called on to defend skivers from being dismissed, not something they will look forward to.

And while the Prime Minister likes using the term when addressing the battlers as if to identify with them and not with the wealthy, "working families" is a term I find hard to understand. Is a family still a working family if, through hard work and enterprise and without trampling on peoples’ rights, family members develop a business that makes them wealthy? And will they remain a working family if the business becomes more successful and the family wealthier while still keeping its principles of respecting peoples’ rights?


In both cases, I think so. However, on the basis of much being said today it would seem not. Indeed, for a variety of reasons, some politicians seem to think a wealthy family cannot be a working family. This seems strange particularly in Australia the land of opportunity, the land that wants people who are prepared to work hard to achieve their goal of a better life, a goal that could be made difficult by the new Fair Work Australia legislation.

Separate from Fair Work, a proposal currently being canvassed by Government is capping the salaries of executives, be they chairpersons, managing directors, CEOs, involved in the day-to-day running of the businesses that employ them. Aren’t they workers?

It seems strange to me that among the politicians canvassing the capping idea, some would make good role models for promoting Australia as the land of opportunity, having become wealthy through their own efforts. Some of course, have become wealthy as a result of marrying into wealth. However, in both cases they now wrap their concern about battlers in a shawl of social concern (new found) by saying that executive employees are overpaid.

However, as I read what they say, it seems to me the targets of their capping are successful people whose political views either they do not share, or people of whom they are jealous. But whatever their reason I doubt it has much to do with the battlers.

To support my contention let me refer you to a report delivered at the annual conference of the Royal Economic Society on March 17-19, 2009, one of the oldest and most prestigious economic associations in the world. At this conference, Professor Andrew Clark from the Paris School of Economics and two colleagues Niels Westergård-Nielsen and Nicolai Kristensen from the Aarhus School of Business, presented the report: Job Satisfaction and Co-worker Wages: Status or Signal?

The report said that according to recent research “Large ‘pay gaps’ within firms may make staff happy rather than envious …” because “workers believe they may receive such high wages in the future themselves”. The report went on to say “that the widening pay gap between managers and workers in many firms will not necessarily cause resentment among those lower down the firm hierarchy. In fact, the low paid are even more likely to be happy if their colleagues are paid more than high paid workers are.”


The authors also comment: “From the exterior, managerial wages may seem to be way too high. But from within the firm, the picture may be far rosier. Others’ good fortune today may be my own good fortune tomorrow. In a world with enough mobility, there is a chance I tomorrow will be in the position of the Joneses today.”

The report also found that:

  • men are more likely to be happy than women if their co-workers are better paid. And private sector workers are more likely to be happy than public sector workers if their colleagues are paid more; and
  • low paid workers are more likely to respond well to their colleagues being paid more than high-paid workers.

No doubt Fair Work Australia supporters will dismiss the report as simply academic opinion. If so, does this mean that all Government commissioned reports from academics are not worth the paper they are written on? And while I agree that some, but not all, academics’ reports might have little value this cannot be said of the aforementioned report which, although compiled by academics, was not government commissioned.

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About the Author

Don Allan, politically unaligned, is a teenager in the youth of old age but young in spirit and mind. A disabled age pensioner, he writes a weekly column for The Chronicle, a free community newspaper in Canberra. Don blogs at:

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