Earlier this week, as the ACTU pointed out, the government’s mid year economic update (MYEFO) confirmed that the Morrison government continues to mislead everyone about wages and that wages would remain suppressed for some time into the future. More mainstream commentators are now linking this to other negative trends in the economy that amount to a drift towards economic downturn, maybe recession.
As we drift further into general economic downturn, felt acutely for some years by wage earners, two useful recent bits of information have come to hand. Neither have been widely reported, let alone discussed.
Rate of exploitation
First, from last week’s quarterly national accounts, we see that the rate of exploitation of the Australian workforce continues to rise.
This rate of exploitation is actually somewhat higher because this ABS data includes the salaries of chief and other senior executives who are not exploited. Rather, on behalf of the owners they serve, they supervise and direct the exploitation of the 90%.
Longer term data shows that the current rate of exploitation of workers is about double what it was 50 odd years ago.
The second item comes from research reported by the Centre for Future Work’s Jim Stanford (CFW).
Young workers and award dependence
We see that 67 per cent of “young people” in work (column “Paid by award”) depend for their standard of living on the rate of pay defined in their relevant industrial award. (For employers engaged in wage theft these minimum rates are what they are trying to dodge.) We also know that women workers are far more likely to be on these minimum rates.
Put together, these two separate pieces of information can inform the discussion we must continue to have about our union movement’s ongoing strategy.
Our union movement’s current strategy is a failure, for all but a few
The current union strategy is dominated by compliance with the many “broken rules” of the FWA09 and, within that by enterprise bargaining (EB).
We also know that the parliamentary road to fairness is a dead end. That’s the big outcome and perhaps the big lesson for 21st century unionists from the Federal election result. Those who want us to stick to the parliamentary road must also explain the “logic” of 5 more years passively complying with the broken rules that rob workers of their power and, among other things, are the architecture of wages suppression and rising profits, and the restriction on workers negotiating the purpose of their work.
The enterprise bargaining (EB) addiction
We know that EB is falling apart and is a dead end. The number of agreements and the number of workers covered by them have been falling for some years now. (See this, and also this.) Union density decline started well before enterprise bargaining but EB has certainly not helped to reverse it.
Our union movement’s fixation on enterprise bargaining can be described as an addiction: it is slowly killing us but every time a threshold EB dispute comes along, we throw our solidarity behind it, while dozens of others receive barely any attention at all, and then celebrate the brave workers if they win (as we should) or complain loudly about the “broken rules” when we lose (as we should).
EB is actually contrary to the core logic, or starting point, of union solidarity: to take wages and conditions out of competition.
What do I mean by that? The very first unionists – discovering their strength in acts of combination – had to learn that workplace only bargaining was the biggest threat to what they would win. A victory in one workplace would be threatened by the competitive advantage to the employers’ competitor that would, in turn, put downward pressure on the victory that had been achieved. The security of one workplace’s wage victory, or improved safety, would depend on it being achieved in the competitor.
Focal points for Solidarity Bargaining
There could be 2, maybe 3, possible focal points that puts Solidarity Bargaining at the forefront of union strategy and pushes EB back to become supplementary action
One of them is industry wide or multi – employer EB, starting from within the current rules. This was discussed a lot during the parliamentary Change the Rules campaign and was one of the prime demands on the Labor Party in the lead up to the election: the restoration of law that enabled industry wide bargaining. (Check here for a recent re-opening of this issue.)
Another is the Annual Wage Review (AWR). These are not mutually exclusive; they can be designed to reinforce each other. For now, let’s take a closer look at the AWR.
AWR: a brief reminder
The FWA09 (current Fair Work Act) requires that each year the FWC (Fair Work Commission), led by its President, conduct a review of minimum rates of pay; not just the statutory national minimum but also the minimum rates for the various classifications in our industrial awards.
2.2 million workers are directly affected by the AWR, plus another unknown number paid marginally above those minimum rates.
The industrial parties – the ACTU on behalf of all workers – and various employer organisations for employers, governments, and some social non-government organisations make submissions about what they say the increase should be.
The rules are stacked against the workers. They remove a bargaining process and replace it with consultations; in effect, for workers and their unions it is toothless because industrial action to support their claim could be defined as not “protected”.
This year the deadline date for the parties’ submissions is March 15th 2020, and the decision must be handed down in late May – early June so that it can be applied from July 1st.
At time of writing we do not know what the ACTU submission will propose. In recent years it has sought to increase the minimum wage to a “living wage”, defined as 60% of the median wage. Last year the ACTU sought an increase of 6% (page 7) to the minimum wage as stage 1 of 2 steps to get the living wage median. They said that if that was granted they would follow up this year (the current Review) with a 5.5% claim.
Last year The FWC awarded 3%, favouring the arguments from the employers in their long explanation.
Alongside of Budget decisions affecting unemployment and associated benefits, the AWR is the single most important annual event that one way or another determines what is happening regarding inequality and the struggle against poverty.
Changing the Rules by doing it?
An alternative, better strategy based on solidarity bargaining must start from within current reality. There can be no rapid shift just because enough of us “call for it”: one day dead end, the next day the light on the hill. It must be developed over time and be rooted in core unionism.
Therefore, over the next few years, and starting as soon as possible, we could restore a focus on an industrial strategy that might start in compliance but then, step by step, some of them big, some of them small, and some in-between, move to defiance. Seeking to win by a big “critical mass” defying the law, not just complying with it.
It cannot be rash or self-indulgent defiance. The strategy must be shared and disciplined, certainly starting small with a decent enough group of unions willing to pursue it, and then accumulating more support and participants as it goes through each stage.
Just as the defensive campaign against the Ensuring Integrity Bill (for more check here) provides a common focus for the whole movement, and requires online and face to face lobbying tasks, an offensive strategy on the Annual Wage Review that escalates solidarity bargaining can start in the same way.
Physical demonstrations can be deployed at selected moments, each having the purpose of informing more members and the broader public of our intent and conducted to attract more people into the actions that will follow, aiming for successively bigger demonstrations.
Every task and action is done to educate all participants that they are together building a 3-5 year strategy.
Think along these lines. What if 600 people – from a good range of unions – rallied in front of the FWC on March 15th (or thereabouts as agreed) to coincide with the presentation of the ACTU’s claim for the AWR now under way?
And then on May Day a couple of months later, on the actual day, there is a follow up with 3000 or 6000 people doing the same, or maybe in front of the headquarters of a major employer organisation?
And, in between, there are smaller but creative physical demonstrations at major events attended by the Treasurer, the Prime Minister or the Workplace Relations Minister.
All the while there is online and face to face lobbying of key politicians, the FWC itself and major employers in support of the ACTU claim and, bringing into play – on the offensive – the 40-45,000 click activists who have been involved in the fight against the EIB.
And, why we oppose the EIB can be a part of the public learning about our demands on the AWR, and associated with that wage theft, built around the theme of fighting inequality.
Union growth can be built into the tasks and actions that drive the strategy in all sorts of ways.
Remember, 67% of young workers are dependent upon the AWR for wage increases because the AWR lifts the rates for each classification in each award (or not). Every union will have members and potential members younger than 35 whose standard of living is defined by the AWR.
Compliant enterprise bargaining is not useful to them, whether they live in poverty, on its border line, or marginally above it. Solidarity bargaining is far more relevant to them.
The economics for this AWR
What follows does not take into account, yet, the impact of the climate change driven bushfires on the economy, although we know already that there is nothing good for tens of thousands already affected.
This AWR is the first since the previous economic downturn in 2008-9 that coincides with both wages suppression and the steady drift into general economic downturn. (For example, read here, here, and here.)
Back then the Rudd Labor government took emergency measures to soften the impact of the global economic crisis in Australia.
However, these did not include changes to Howard’s notorious Workchoices industrial laws, nor better law for annual minimum wage fixing. The so-called “reforms” of the FWA09 did not start until late 2009.
Howard’s fair pay decision maker, Stephen Harper, an academic economist was still in place. and he decided that the pay increase for the year of that downturn, 2009, would be 0%.
Harper is now on the board of the Reserve Bank. The Reserve Bank’s approach to wage suppression is to say that it is a serious problem and then ask employers to give a bit of a wage increase if their employees ask for one. They have never endorsed the ACTU approach to minimum wage increases and probably never will.
Now is a good time
Today, 21st century workers are being exploited at twice the rate that workers of the late 60’s and early seventies.
Enterprise bargaining unionism has contributed to that situation.
It’s time to restore an industrial strategy that re-builds the foundations of power that provide industry and class wide power for workers … it’s called solidarity bargaining.