As one might expect, in the leadership debate, Howard made a few claims about the IR "reforms". Lets examine the veracity of some of these claims, remembering of course that one does not need to tell an outright lie to be untruthful. For example, when Howard was asked whether, under his WorkChoices laws employees could be deprived of all their redundancy entitlements, he didn't tell an outright lie - he did not say "no". He also didn't tell the truth (ie "yes they can be and the so-called fairness test won't help them"), instead he launched into an irrelevant tirade about some old reforms to preserve entitlements of employees whose employer went into liquidation.
So what about some of the less obvious untruths? Let's take Howard's statement that Australia has the second highest minimum wage in the developed world. There are several ways that one could measure how high the minimum wage is. A raw dollar value is not particularly useful as the dollar will have different purchasing power in different countries. Wage adjusted for purchasing power ("purchasing power parity") is a better measure, as is percentage of average income.
Let's take a look at the OECD figures of minimum wage as a percentage of average income:
The first thing that is obvious is that in 2000 Australian minimum wage was indeed the second highest in the OECD. In 2006, this was no longer the case. While, at about 53% of the average wage, Australia's minimum wage is higher than the OECD average, it now ranks fifth, with NZ and Hungary following closely behind it. Another thing that cannot escape notice is that Australia is one of only 5 countries where the minimum wage has fallen vis a vis the average wage, and one of only 3 countries where this fall was quite significant. The other two countries are US (whose IR system Howard seems keen to emulate) and Mexico.
Lets look at the Purchasing Power Parity (PPP) adjusted wage:
It is the same story - Australia was second, or maybe even first, in 2000, but slipped to fourth place by 2006. Minimum wages have been getting lower, not higher under Howard government.
If Howard had been truthful he should have said "in 2000 Australia had the second highest minimum wage in the OECD, however the last six years of my government saw a fall in the minimum wage, putting further pressure on low income families". But perhaps Howard wasn't trying to mislead - perhaps, as has been his habit, he was looking wistfully to the past rather than facing the present and planning for the future.
And while we are on the subject of the IR untruths. During the debate Howard told the nation that he believed unions had a legitimate role to play. This may have been comforting to those of us who don't think a teenager looking for her first job can effectively bargain with an employer, if it wasn't for Hockey saying completely the opposite just a few days earlier. In an interview on AM radio on the 18th of October Hockey stated that the role of unions in Australia is "essentially over". It is not quite clear whether it is meant to be a statement of fact or of Howard government aspiration, but it does not sit easily with Howard's statement in the Leadership debate.
Remember those ridiculous big business-sponsored ads showing three thugs (supposed to represent union members) switching the lights off at a dress-maker store? Needless to say that militant unions and textile industry (especially small tailor shops) are not a realistic combination. In fact, somewhat ludicrously, one of the purported "union thugs" is wearing a CFMEU symbol - it is hard to see how CFMEU would be involved in dress-making shops, but obviously there is not need for reality in the favourite past-time of big business and Howard government - constructing union activists as thugs.
But with this ad the big-business sponsors have shown a closer associated with thugs than the union officials they are keen to defame. The Age reports that two of the three actors in the ad are real life criminals, convicted of a host of offences, including drugs, dishonesty crimes and sexual crimes against under-age girls.
The ad was pulled after the identity of these "actors" was revealed, but it has served its purpose - showing that the big business unions may well have closer association with thuggery than the unions that defend workers' rights. This is yet another embarrassment in the WorkChoices advertising campaign: a little while ago an ad had to be discontinued when it was discovered that actor in the ad ripped off his workers to the tune of about $13K and is now being prosecuted. Perhaps it is just too hard to get honest actors who could even pretend to support the Howard government's unfair workplace laws.
Watching TV is becoming increasingly more unpleasant - those incessant WorkChoices ads are very annoying. The nonsense about employees having “even more protection” from an ambiguous and unenforceable, backpacker administered fairness test, the smug looking actors trying to convince us that employers would never sack anyone unfairly, the self-serving big business ads…
So I decided that every time those ads become particularly annoying, I’ll be running a counter-advertising campaign on this blog.
The Workplace Research Centre just released a comprehensive research report into the effect of WorkChoices in the retail and hospitality industries. If any more proof was needed of the harm that WorkChoices causes to ordinary employees, this report provides it.
Some 20 researchers looked at every collective agreement lodged between 26 March and 8 December 2006 in hospitality and retail industries, in which many workers were previously dependent on awards and compared the pre-WorkChoices agreements with the post-WorkChoices agreements.
An important, although not unexpected, finding of the study was that, while most non-union agreements removed a number of "protected" or other conditions that were in awards, about 90% of union agreements retained protected conditions and some other conditions. The WorkChoices legislation clearly worked as the government intended - where employees lack bargaining power (ie non-unionised workplaces), they are fair pickings for unscrupulous employers. The study found that, in comparison with pre-WorkChoices awards or agreements, post-WorkChoices agreements removed:
• annual leave loading (80 percent of agreements) • laundry allowance (79 percent of agreements) • Saturday penalty rates (76 percent of agreements) • Sunday penalty rates (71 percent of agreements) • overtime rates (68 percent of agreements) • public holiday penalty rates (60 percent of agreements) • paid breaks (55 percent of agreements)
Further, they removed or reduced:
• decreased casual loading (74 percent of agreements) • severance pay (65 percent of agreements) • rostered days off (63 percent of agreements) • limits on part time hours (62 percent of agreements) • right to average hours over 1-4 week (62 percent of agreements) • minimum part time daily hours (56 percent of agreements) • time off between overtime and the next working day (54 percent of agreements).
The study also found that employees sustained very substantial decreases in earnings. Even without factoring in lost paid breaks, annual leave loading, overtime, severance or redundancy or unquantifiable matters such as losses in flexibility, rostering or family friendly arrangements, the study found that some employees lost as much as 30% of their pay as the result of WorkChoices. Part time and casual workers are the worst affected, confirming the adverse impact that WorkChoices has on women, who are most likely to be working on casual or part time basis.
As an example of some earnings losses as result of WorkChoices:
• Liquor stores: losses of between 11.9 and 31.1 percent • Fast food: losses of between 12.5 and 21.3 percent • Bakeries: losses of between 17.9 and 24.5 percent • Restaurants: losses of between 10 and 12.8 percent • Cafés: losses of between 10 and 15.7 percent.
Generally, the report found that:
(a) Retail: on average the losses were between 2 and 18 percent. The potential average gains were never more than 0.5 percent. • Casual part time sales assistants working a 12 hour week in retail lost on average 12 percent of their earnings. • Permanent part time workers on the same hours lost 18 percent.
(b) Hospitality: the losses were between 6 and 12 percent. The only gains were in union agreements and at most these were just over 3 percent. • Permanent part time waiting and bar staff in the hospitality industryworking a 21 hour week of split shifts lost 12 percent on average.
There was no evidence of agreements being tailored to particular workplace. In fact, almost half were template agreements drawn up by workplace consultants. This finding rebuts the government's unsubstantiated claims about employers and employees use WorkChoices to negotiate agreements that suit them. WorkChoices is being used by employers to strip away employee rights and entitlements. Where there is no or little union presence in the workplace, the employers are succeeding in that endeavour.
The following extract from a workplace consultant's webpage, set out in the report, neatly summarises how employers are using WorkChoices:
Ie - you have been granted the right to strip away employee entitlements, so go for it! What are you waiting for, its not like the workers matter under the Howard government!
This proposed use of WorkChoices is at odds with government claims about the intent of legislation. The true intent is of course to drastically change the power balance between employer and employee, allowing the former almost complete control over the industrial rights of the latter, but you won't see this in any WorkChoices advertisement.
Barbara Bennett, the head of Workplace Authority and the star of Howard government's ads singing praises to Workchoices, is doing her best to prove that the popular beliefs about Workchoices may not be as mythological as the ads would have us believe and that getting objective facts about the impact of Workchoices and the application of the "fairness test" may not be a simple matter.
No doubt, Barbara Bennett is right. Openness and accountability would certainly be against the spirit of Workchoices or the intent of the government in how the Workplace Authority should apply the legislation. We should not have any access to real information. We should just listen to the government ads and trust that the Workplace Authority, which proved that it is a political institution when Ms Bennett chose to appear in the ads, will administer the system fairly and objectively. We should just trust that backpackers sourced from nearby hostels, with a week of training, will be able to fairly and correctly administer the flawed and complicated "fairness test" (and lets remember that there is no review or appeal). We should just trust that the authority which refuses to release information on AWAs is protecting the employees, rather than pandering to the political agenda of the Howard government.
Yes, just like those Workchoices ads, the "trust me" line is a bit hard to swallow. Especially when, days after promising transparency, Barbara Bennett proved that transparency and accountability is a myth by refusing to disclose actual information behind the propaganda. Especially when this refusal is ever so convenient for the government and is reminiscent of the government's own practice of keeping information from the public. Barbara Bennett would have been aware that her conduct is likely to attract public attention. Therefore, whatever the Workplace Authority is trying to hide must be more damaging than exploding the myth of impartiality, transparency and accountability of the Workplace Authority.
There is only one myth that could be exploded by provision of the AWAs - and that is the myth that the Workchoices system is protecting the employees. No wonder the Authority and the government may want to keep it under wraps.
It's not like we have enough misleading Howard government advertisements clogging up our TV screens, a coalition of business groups have now released their own "independent" advertisement in support of Howard government WorkChoices laws (designed by Liberal party pollsters, no doubt for maximum independence from the government!). If anyone was in any doubt about whom the IR laws were designed to benefit, that doubt should have been dispelled by the business groups spending millions on these advertisements. But lets take a look at the ad:
The ad starts with telling us that "it hasn't been easy, but over the last two decades Australia has undergone workplace reform". Well, that's interesting, lets stop right there. Over the last two decades? So a decade before the Howard government the then Labor governments were changing and reforming our IR system to make sure it kept up with the times. But that's not what these business groups want - they don't just want progress, they want the extremes of Howard government's IR agenda.
Then we have those great slogans of all WorkChoices propaganda "Choice", "Flexibility" and "Productivity". Yes, the business groups would like the choice and flexibility it gives the employers to cut their employees' conditions, wages and protections and to force more flexibility out of employees. There are no real choices or flexibilities for the employees, but who cares about the workers, right? The ad then heads into even murkier waters. "Australia's economy has grown by nearly 4%" it boasts - quoting March '07 quarter ABS figures. This is accompanied by a graph showing the rate of growth in seasonally-adjusted GDP increasing from zero to 4% (presumably in response to WorkChoices legislation):
The representation in the graph is blatantly misleading. Needless to say, before the introduction of WorkChoices, GDP growth was nowhere near zero. Secondly, the ad suggests that there is some sort of a causal relationship between WorkChoices and 3.8% annual increase in the GDP evident from ABS figures. No such relationship has been established. Further, GDP growth has on several occasions exceeded the 3.8% in the last decade, see the graph below:
The rate of GDP growth goes up and down in cycles (the average over the 20th century is about 3.5%). To implicitly suggest that the current rate of growth is unusually high or that it is causally related to WorkChoices is to engage in deception.
The subsequent representations that "since the introduction of workplace reforms" new jobs have been created, exports increased and higher dividends have been paid to shareholders are similarly misleading because they suggest a causal relationship between WorkChoices and any economic events since their introduction. The suggestion is utter nonsense. For example, employment figures have been increasing steadily for more than a decade before the introduction of WorkChoices. Similarly, export growth figures are not unusual and the sector is much more likely to be affected by free trade agreements that have been signed, international price and currency fluctuations and international economies than WorkChoices. The suggestion of a link between the two is simply mischievous. The same reasoning applies to dividends to shareholders. Incidentally - if there is a link between dividends and WorkChoices then perhaps we should blame the recent sharemarket collapse on WorkChoices!
Having finished with the blatantly misleading praising of WorkChoices the big business advertisement then descends into ridiculous warnings of the end of the world if WorkChoices laws are abandoned. There is the very subtle "gone out of business because of union bosses" sign painted over a window (gone out of business because of corporate fraud or mismanagement would be a much more realistic sign) followed by a statement that to undo WorkChoices is like trying to unscramble an egg (hmm, WorkChoices = scrambled eggs, nice analogy!).
And then we have the best part - a doom and gloom scenario based on "independent" research. The so-called independent research report that is pictured was produced by Econtech - a company that has close affiliations with the Howard government and the report was in fact commissioned by ACCI for the purposes of this ad, based on rigged assumptions designed to create the outcomes that ACCI wanted.
This blatantly misleading ad concludes with a plea to "keep the workplace reform". Trust us - we the big business know whats best for you. OK, so our member companies maybe the ones that are slashing your conditions and reducing your take home pay, but its not like we are just interested in our profits and our executive bonuses. OK, so we just released a deceptive advertisement, but its for your own good you know, how else are we supposed to get you plebs to see the benefits of being deprived of your rights? Just trust us, ok?
I was at the Law Institute of Victoria Workplace Relations Section debate yesterday. The topic was "AWAs: Should they stay or should they go?" and the two combatants were Jeff Lawrence of Liquor, Hospitality & Miscellaneous Union (LHMU) and next secretary of ACTU and Christopher Platt from the Australian Mines & Metals Association (AMMA).
I don't propose to give any sort of a detailed account of the debate. It was what you'd expect - Platt was arguing that AWAs are wonderful and are good for employees, at the same time as revealing that, even in the mining industry, employees on AWAs earn less than those on collective agreements, Lawrence was extolling the virtues of collective agreements and freedom of association, Platt was countering that by arguing that freedom of association includes freedom from association, which he seemed to interpret as depriving everyone of opportunity to associate.
A slightly disturbing aspect of the debate was that Lawrence came across as a rather unconvincing speaker. He did not do a great job dismantling Platt's arguments and often did not address those arguments at all. His speech came across as poorly structured, poorly researched and poorly presented. One would expect more of the next secretary of the ACTU. Platt was a much more engaging speaker, even if his arguments were full of holes and based on made up data - for example he misrepresented the content of the latest report into AWAs by Professor Peetz by asserting that AWAs increased wages in hospitality and retail industries, which is not the case.
But the crux of the AWA debate was summed up in Platt's response to a question from the audience regarding his assertion throughout the debate that AWAs allow employees and employers free choice of how their employment relationship will be structured (in his words allowing them to achieve "a meeting of the minds"). In response to the question Platt elaborated on that choice: if a potential employee is told that he can have a job on the condition that he signs an AWA because that is how the particular workplace operates he has a choice - he can sign an AWA or he can look for another job. The choice, according to Platt, is that of the employee!
It was a perfect illustration of the fallacy of the rhetoric of choice in the employment sphere. If the potential employee has valuable skills that are in short supply and the employer has no better candidates, sure, there is a choice. Of course if AWAs become the standard practice in the particular industry even an experienced and skilled employee may find that his choice of whether to sign an AWA becomes illusory (because the prospect of finding an employer that doesn't use AWAs is greatly reduced).
But if the employee is young, inexperienced, without highly sought after skills, is a migrant, a mother re-entering the workforce after an absence, an older person or any one of the many vulnerable groups (ie precisely the groups that require protection in the IR sphere) the "choice" is between taking the position on an AWA or selling Big Issue on a street corner. Let's not forget that if a person on welfare turns down the job, chances are they'll be in breach of Centrelink rules and will find themselves with no welfare payments for a number of weeks or months. Their "choice" is thus between abject poverty and signing the AWA.
Free choice implies a range of real options. A person faced with an ultimatum "your wallet or your life" may make a "choice" to hand over the wallet, but no one in their right mind would argue that it is a real or free choice. The outcome of that choice is pre-determined by our sense of self-preservation. So why is it that we accept the rhetoric of choice when it comes to AWAs? A potential employee is placed in a similar situation to a robbery victim - they can starve, they can beg on the streets or they can sign the AWA. Their sense of self-preservation dictates only one possible outcome. The more normative AWAs become, the more predetermined that "choice" is.
The only true choice regarding AWAs will be the choice we exercise at the ballot box in this year's election and, if we are not careful, this could be the last true choice in the IR sphere for a very long time.
Update: please see Christopher Platt's response in comments
I must say that Gillard is quite an impressive speaker. If the Labor party had a few more pollies like her I might have considered voting for them in the next election (although they are likely to get my vote on preferences anyway). Ok, enough small talk.
At the start of her speech, Gillard reaffirmed the Labor party's promise to reform and harmonise legislation to protect outworkers in the textile industry (most of them migrant women). She gave examples, from her work as an industrial lawyers, of these vulnerable workers being cheated of entitlements such as annual leave, redundancy, long service leave, or even wages as their unscrupulous employers frequently changed their corporate identities or closed up shop without notice. Labor's promise to reform regulation of outwork is a positive step, as is the plan to "kickstart the development and promotion of the Homeworkers’ Code of Practice and the "No Sweat Shop" label."
One of the most interesting and topical parts of Gillard's speech concerned the impact of AWAs on women in the workforce. She cited recent ABS data which showed "that women working full time on AWAs take home on average $87.40 per week less than their colleagues working on collective agreements based on their rate per hour. Women working on AWAs in casual jobs earn $94 per week less than women on collective agreements."
Women on AWAs also worked longer hours. Gillard referred to a Victorian Government report released in March which revealed "that female full-timers received 5 per cent less per week on an AWA than on a collective agreement even though they worked an additional 1.3 hours per week."
When you think about it - its not that surprising. AWAs have drastically shifted the balance of power between employer and employee. It can be expected that the greater the power imbalance, the more likely it is that the employee can be compelled to accept inferior working conditions. Unfortunately women still have less power in the workplace than men - they are more likely to be found in part-time or casual jobs because of family commitments, they are more likely to be absent from the workforce for extended periods of time to have and care for children, thus reducing their employability. They are also predominantly concentrated in lower paid, lower skilled jobs such as hospitality and retail (which incidentally are the industries that use AWAs the most), making them more "replaceable" and easier to coerce. And women sometimes lack the confidence the bargain as effectively as men (wonder if it has to do with the social conditioning that we should be sweet, non-confrontational peacemakers)
In fact, in her speech, Gillard referred to a report into women in the professions conducted by the Association of Professional Engineers, Scientists and Managers, showed that more than half of respondents reported that they were "not very confident" or "not confident at all" in negotiating good remuneration and working conditions with their employer. And these are professional women, who would be expected to be more confident in bargaining that women in non-professional employment. As Gillard pointed out this is a "truly worrying result when the existing industrial laws are predicated on individuals bargaining with their employer."
Julia Gillard talked about Labor's IR policy and parental leave policies designed to make it easier for parents to balance work and family. This policy included 12 months unpaid parental leave to each parent (which may hopefully encourage more men to take up parental leave and give them the opportunity to spend more time with their children) and flexible work arrangements for families with young children. Gillard gave an excellent response to Howard's suggestion that providing parents with more flexibility would discourage employers from hiring women.
When asked about Labor’s policy by journalist Laurie Oakes, the Prime Minister claimed that it would result in employers refusing to employ women with young children.
"You run the risk, Laurie, if you put it into legislation that some employers will avoid employing women, in particular with young children" [Prime Minister John Howard, 29 April 2007]
The Prime Minister used exactly the same argument that was used back in 1979 in connection with the Maternity Leave Test Case of that year. Since that Test Case, women’s participation has increased by more than 30 per cent.
It was a knee-jerk reaction from a man living in the past who thinks women are at the margins of our workforce and employers can simply overlook their participation. A man who fails to recognise our economy’s twin needs of skilled labour and supporting those who are bringing up the next generation.
A callous response from a man who does not even try to understand the anxiety of young women torn between the need to return to work and the desire to see their child take their first steps.
She may have also added that it is a highly hypocritical reaction from a man whose government uses family or children's interests as political slogans when it is convenient, but fails to support policies that would enable parents to spend more time with their children (and with each other) while still being able to participate in the workforce.
Gillard also spoke about other matters, such as superannuation and childcare. Just click on the link above for the whole speech. It's worth a read, as I said, it was a very good speech which I wanted to share.
I am planning to do a series of posts on WorkChoices and AWAs, so if anyone's interested, please keep visiting and, as always, thanks for reading :-)
The Australian Fair Pay Commission released its July 2007 wage decision (which will come into effect in October 2007). The summary of the decision can be viewed here. The Commission increased the federal minimum wage by a princely amount of 27 cents an hour for the workers on pay scales under $700 per week and by an even more "generous" 14 cents an hour for workers on pay scales over $700 per week. These increases add up to an extra $10.26 per week and $5.30 per week respectively, before tax.
For a worker on the minimum wage of $522.12 per week, this amounts to an increase of 2%. For a worker on a pay scale just under $700 per week, the increase is 1.5% and for a worker on a pay scale of above $700, the increase is less than 0.76%. When you consider that the inflation rate is 2.4% and that the Commission will not issue another decision for a year, the lowest paid employees are sliding backwards - prices are increasing faster than their pay rates. At the time when the government attempts to dazzle us all with talk of economic prosperity, its dividends are not being shared equally - the poor are becoming poorer.
Let's compare this wage "increase" with the 6.7% increase scored by federal politicians some three weeks earlier. The same people who created a system that gives workers a pay rise less than the inflation rate obviously need considerably greater increases in their pay packets.
And if any further proof is needed that the minimum wage increase is a measly fob-off to ordinary workers - that proof is delivered by industry representatives' comments on the decision. When the ACCI and various industry bodies describe a wage increase as "moderate" or "fair and responsible", you know that the workers have been given a raw deal.
These days The Australian often reads like it is edited by the Liberal party. Today's editorial regarding Labor's IR policies is no exception. The backhanded compliments to Labor for "fine tuning" its IR policy do little to disguise the fact that the Australian apparently believes that the only way that Labor's IR position is going to be "acceptable" is if it mirrors that of the Liberals. The arrogant attitude that the only way that thinking of "the left" can be respectable is to become the same as ideology of "the right" was revealed in previous the Australian editorials.
This misleadingly complimentary editorial is perhaps more dangerous than the previous diagnosis of non right-wingers as "psychotic". Let consider the following statement:
The elephant in Labor's IR room, however, remains Ms Gillard's pledge to scrap AWAs. The Australian accepts collective agreements may be a beneficial safety net for low-paid workers. We accept that collective bargaining should be a right for those who seek it, but we fail to see the need for intrusion into the lives of highly paid workers who want to enter an individual non-union contract. To us, the Government's no-disadvantage test for workers earning less than $75,000 a year appears to be a reasonable compromise.
Let's forget for a second that the government doesn't have a "no-disadvantage test" - that's the test that it scrapped when it introduced WorkChoices. What it did introduce is the so-called "fairness test" (which is unlikely to remain for long should the government win the next election). Not only is the operation of the test uncertain, it is unreviewable by either the employer or the employee (except via the High Court). What is "fair" is decided by a government agency and there are no avenues for appeal or review. A right is not a right at all if it can't be enforced.
It is good to know that the Australian accepts the right to collectively bargain if an employee wants it, but that acceptance does not address the problem that employees face if their employment is made conditional on signing an AWA. The right to collectively bargain is meaningless if an employee has to chose between waiving that right and unemployment.
What the Australian editorial also seems to overlook is that, with or without AWAs, there is nothing stopping an employer and employee negotiating an individual non-union contract which is more favourable than award or collective agreement. What is objectionable about AWAs is that they can be used to undermine award or collective agreement conditions because they prevail over those agreements. Ie. AWAs remove the safety-net. An individual contract cannot prevail over collective agreements, but it will not stop "highly paid workers" negotiating more favourable conditions than the award safety-net.
The apparent reasonableness simply serves to conceal the disingenuousness of the stated position. The need to abolish AWAs stems not from "demands of unions", as the editorial suggests, but from the need to protect workers, especially vulnerable workers from exploitation. It is about our rights in the workplace.
By the way, yesterday I had the good fortune to attend a function where Julia Gillard gave a speech discussing, among other things, the impact of AWAs in the workplace, especially the impact on women. It was a very impressive speech and I'll do one or more posts about it in the next few days.
Half the world is composed of people who have something to say and can't, and the other half who have nothing to say and keep on saying it. - Robert Frost
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