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The Forum > Article Comments > The benefits of a freer labour market > Comments

The benefits of a freer labour market : Comments

By Richard Blandy, published 3/11/2005

Richard Blandy argues the new IR reforms will make a good contribution to the long run welfare of the Australian people.

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The direction of Labour Relations in Australia is steadily moving away from orderly regulation.
With a freer labour market employers hope to see a return to the Master/Servant relationship where they exert complete control of their workforce extending to the determination of pay, working conditions, hiring and firing.
The Howard Government has consistently worked to support employer demands by maintaining substantial unemployed percentage through stringent means testing of welfare benefits. This has placed greater pressure on charity agencies.
The major beneficiaries of this strategy have been the hospitality and service industries that are the largest employer of young, unskilled entrants to the workforce, the most vulnerable to exploitation.Effective Union Representatives are faced with exclusion from workplaces to prevent recruitment and organisation in favour of 'Company Unionism'
(I define a Company Union as one where members are recruited on hiring by management and authority signed for payroll deduction of dues. The workers never meet a Union Organiser)
The decrease in apprenticeships in skilled areas has resulted in serious shortages which in turn improves the bargaining power of qualified tradespersons.
The Employer/Government response has been to pirate skilled workers from abroad on workplace agreements.
Meanwhile, employment is offered to unskilled young Australians to join the armed forces to provide back-up support for the American Empire's Globalisation.
There is not likely to be a resolution to this reversion to unprotected work environment without a major qualitative change of Government that values working people .
Posted by maracas, Friday, 4 November 2005 7:53:13 AM
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Realist, maybe that would work but there would be certain occupations where it would not work - those ones that blur the line between skilled and unskilled.

Would collective bargaining be banned in the so-called skilled section. Teachers wouldn't be happy with that.

If this not banned but workers have a choice, are you saying that unskilled people are either too stupid or too spineless to negotiate a contract for themselves.

It just wouldn't work - treating different people on the basis of skilled or unskilled.

Seether - I can see where you are coming from (and your post belies your non-de-plume). I still think though small business will have greater flexibility in hiring people. This might lead to people being sacked as well but from the small businesses I know, they keep good employees, even if they fall into the so-called unskilled category.

t.u.s.
Posted by the usual suspect, Friday, 4 November 2005 8:04:20 AM
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Richard knows that in a perfect labour market there will be an equilibrium between supply (workers) and demand (employers). Theoretically, the following conditions are necessary for perfect competition

1.Perfect knowledge

2.No barriers to entry or exit

3.No player dominates the market

The Australian labour market falls short of a perfect market because it fails to achieve

perfect knowledge - doesn’t exist for non unionised labour who generally have confidential agreements allowing workers in the same workplace often earn $25000 more / less for doing the same work

barriers to entry to skilled jobs are very high – it takes 8+ years to train as a doctor if you can get in. The new IR regulations actually will increase the paperwork involved in hiring new employees - raising barriers to entry - hence rise in labour hire firms

employers usually dominate the labour market. In country towns the timber mill employing 200 workers dominates the labour market, government departments dominate the employment markets in which they operate. ABC Learning Centres and Peppercorn dominate the market for child carers and set the pay rates and conditions in that market.

Applying more [rusty and unfashionable] Keynesian economic theory if you drive wages down you reduce disposable income thus reducing demand for non-essential products. So when the new IR policies really bite if you aren’t selling cheap food then you haven’t got a market for your product. Look at Venezuela, same GDP as Australia, same size population but all wealth is in the hands of 2000 families and the rest of the population ekes out a subsistence living.

Workers whose labour can’t be commoditised or outsourced will retain some bargaining power but educated workers like lawyers and accountants will find their jobs can be done in India, as manufacturing workers have discovered their jobs can be done in China.

If Australia wants to have a vigorous and viable economy then we need to have a vision for economic sustainability rather than the current policy of concentrating more wealth in the hands of the rich and development of a large underclass of working poor.
Posted by sand between my toes, Friday, 4 November 2005 9:01:17 AM
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Richard, I suspect when the University of South Australia, hands you you own AWA stipulating less pay and conditions, you will happily sign it. By your age, you have lived with the present system, and presumably done quite well, and have everything anyone could ever want, however you don't seem to understand that you are only another employee of an organisation wanting to decrease their costs. Wait till you personally feel the sting in the tail in this legislation, and write about your therioes then, luckily for you, that you are at an age where you could retire tomorrow, not all Australian employees are in that happy situation, but you don't care because you are a selfish and greedy old man, aren't you, and yes if I have made a few spelling errors, we are not all blessed with your education either, which probably came from being born into a rich family instead of a poor one
Posted by SHONGA, Friday, 4 November 2005 2:43:28 PM
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To Confirm,

It would work for sure usual.

It would take all of 30 seconds to find a solution for what you mentioned.

Teachers are skilled workers, forget thier traditional collective bargaining, it is a tool they use in the traditional climate. I know first hand that many teachers will love the fact that they have an opportunity to excel and to be paid in direct proportion to their skill set, not the group skillset.

Good teachers can finally be rewarded whilst those without thier priorities in order will have to pull thier socks up or face a poor individual package. Perhaps the performance of the students (in effect themselves) would be integral finally. we are in a world where we need these type of changes, and that is why i can see that side of Johnny Howards argument. It does not work across the board though.

This is different than an industry like the meat industry for instance, where better labourers will not nessecarily be recognised from the poorer ones.

If people want to collective bargain, go for it, but in the unskilled section. Those with qualifications and in occupations where productivity is quantifiable & measurable on an individual level such as a teacher would reap these changes.

Defining which class an occupation lies is the easy part Usual, and it will work, please tell me why it wont.
Posted by Realist, Friday, 4 November 2005 3:02:51 PM
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The idea definitely has merit but there is still the issue of semi-skilled employees - there is too much room for judgement.

Say a journalist who has worked since being a cadet (me for example). I have no formal skill other than I can write. Am I unskilled or skilled.

I still think it is unfair to ban collective bargaining from some professions and individual bargaining from others. There should be choice for everyone.

If you are a labourer and you think you are better off with an AWA - do it. If you are a teacher and feel better off in a union. stay in it. There should be choice, which is what these reforms are trying to achieve.

There shouldn't be rigidness. Keep keeping it real though.

PS I would love to see some of the teachers dragged kicking and screaming away from the unions. it would be a sight to behold.

t.u.s.
Posted by the usual suspect, Friday, 4 November 2005 4:05:42 PM
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