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The Forum > Article Comments > The IR conundrum: society or economy? > Comments

The IR conundrum: society or economy? : Comments

By Tim Martyn, published 15/11/2005

Tim Martyn argues there is a trade off between society and the economy with Australia's new industrial relations laws.

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Of course most of us want fair Industrial relations in Australia. The larger question is to do with how our economy can operate within the globalized world economy, where workers are already savagely exploited, and still maintain the levels of prosperity in Australia which we have at present, which enable our material and human standard of living to be maintained. How can we compete when Chinese workers are paid patheticly low wages and their cheap goods flood the markets of the world?

Economists are not well fitted to explore the human realities of hearts and minds, but it would seem that some kind of change of heart at the controlling levels of the world economy is needed if there is to be a fair distribution of the financial outcomes of a fully globalized economy - for Chinese as well as Australians. Multi-million dollar pay and indeed payouts at the top end and depressed worker wages are inconsistent with a decent regard for fellow human beings, but how can the rich be induced to recognise that there are worthwhile alternatives to wealth?

One partial solution might be the abandonment of the current fawning adulation and media induced hero-worship of the mega-rich. Let the wealthy have prestige, admiration and respect in so far as they practice their philanthropy; let them be conspicuously scorned as the heartless philistines they are if they persist in the mindless parading of their unconscionable ill-gotten affluence. This kind of response is within the power of ordinary people who can reject the manipulations of the media of mass misunderstanding.

Does it have to come to the point of the first and famous French Revolution before privilege for the wealthy and pain for the poor manifests in violent social upheaval that throws doubt upon whether huge social inequality is worth it for anybody. The current situation in France suggests that other societies are madly headed in the same direction. Do we have to be so stupid?
Posted by Lyall, Tuesday, 15 November 2005 12:41:16 PM
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IF the new IR changes survive the proposed High Court challenge intact (which I seriously doubt) what will be the result when Labour gains power next?

Will the ALP Federal Parliament override State Parliament's views of the appropriate wages?

This would result in wage rises / price rises / etc.

This is inevitable (indeed by the time labour gets re-elected the disparity between minimum wage employees and the remainder of the country may require drastic action).

Irrespective therefore of the short-term benefit to business, the long term prospects for business, efficiency and productivity (& consequently economic growth) would be extremely grim.

In this circumstance, we WILL indeed be in the position that we have another recession, tis time however, one that Australia never needed to have. The long term consequences of this absurd gutting of the Federal division of power will be to the detriment of all Australian's, and ultimate responsibility for it must rest with the Conservatives.
Posted by Aaron, Tuesday, 15 November 2005 12:55:30 PM
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As will be shown by tonight's national news, employees have come out on mass to protest the IR changes, it would be a very brave Senate that would approve them now, with the full knowledge, that if they do, it will certainlt result in the removal of the Howard Government or Costello/Turnbull Government at the next election. People obviously saw through the $55 million taxpayer funded media campaign, telling us how much better off we would be with less pay, and fewer conditions, the booklet following the TV add's will only add insult to injury, and ensure the issue gains further opposition.
Posted by SHONGA, Tuesday, 15 November 2005 1:51:38 PM
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"In Australia, a worker’s right to a living wage was declared in the Harvester Judgement handed down by Justice Higgins in 1907. In it, Justice Higgins determined the minimum weekly wage required to support a family of five by establishing the cost of living, i.e. the amount an average worker paid for food, shelter and clothing. The agreed upon sum of two pounds two shillings per week would enable a family, on a single income, to live in “frugal comfort”."

It's a pity we don't live in the early 20th century anymore, because the Harvester Judgement may have some relevance to the here and now.

Australian society has changed plenty since these days Tim. Traditional families with three kids are by no means very common in 2005. Families are more likely to have just two kids and a growing number either have no kids or the absence of one of the parents. Not to mention the growth in singles, especially all the women in the workforce who delay child rearing until their biological clock is ready to explode.

People should be free to work for whatever they think they are worth. If they don not think they can survive on the minimum wage, they either change their spending habits or they get a job where their labour is valued more.

Why should someone in Goulburn get paid same amount as someone in Sydney simply because they do the same job. It fails to recognise the cost of living in regional towns and actually works to keep people unemployed in regional areas.

After James McConvill's horrible piece about Paul Keating a coupla weeks ago, I found myself agreeing with hispiece in The Oz today about labour reform. Have a read, it actually injects some common sense to the argument.

Businesses are not there to provide welfare, they will pay workers what they are worth.
A business which shortchanges its workers will end with the same fate as say a restaurant which skimps on good quality ingredients.
You get what you pay for whether that be raw materials, transport or labour.

t.u.s
Posted by the usual suspect, Tuesday, 15 November 2005 2:01:00 PM
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It is not a matter of choosing between society or economy. A flexible labour force is necessary if the Australian economy is to flourish.

Without a minimum wage and unfair dismissal laws, businesses can employ more people and/or be more competitive internationally.

Wage is a price and therefore it should be determine completely by market forces. If in an industry, wages are too low, then it is a signal to people in the industry that there are better opportunities elsewhere and that they should look for work in the other industries.

So it is not clear that the changes will create a class of working poor.

What might happen is industries that are labour intensive will diminish and other industries, particular industries that Australia has a comparative advantage in, or in other words, industries that countries with cheap labour don't have a comparative advantage in, will flourish.
Posted by SL, Tuesday, 15 November 2005 5:42:19 PM
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SL, so the 40 thousand people that marched in Brisbane today know nothing, - have no clear understanding of how the new IR laws will effect them and their families?

They all looked like reasonably intelligent people to me.

The people I marched with included industrial lawyers and economists from universities across Brisbane.
Posted by Rainier, Tuesday, 15 November 2005 9:36:22 PM
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