Tuesday, 13 September 2011

Labor's labour pains

The ministers I like are the ones who master their brief. Chris Bowen is in that category. Bowen answers questions, he is accessible to the media and he does not shirk the actual debate. Scott Morrison is in the same class.

Sometimes it takes two to tango in politics. Bowen and Morrison let the public into the debate. They make it interesting and elevate the debate.

Sadly, this better-quality discussion amongst politicians is nowhere to be found in industrial relations. For starters there is basically no debate at the political level.

So the main voices are business, the occasional academic and the army of union bosses like Joe de Bruyn, national secretary of the Shop, Distributive and Allied Employees Union. The Productivity Commission (PC) report on the retail sector is comprehensive and should be the subject of a proper debate. Instead Joe's best effort was to say that retailers are "crying wolf" and retail was "wildly profitable" although the Australian Retailers Association reported clothing was down 7.2 per cent over the past 12 months and department stores down 2.2 per cent.

Andrew Leigh, Labor MP and formerly Professor of Economics at the ANU (AFR – September 6, 2011), has put the most considered case against those who oppose Labor's reregulation of the labour market. His main point is to rebut the reformists who he says claim that "a return to the industrial relations system that existed from 2006 to 2009 would boost productivity in Australia". He says that productivity growth was lower under WorkChoices than "in any three-year period in recent times".

His argument is immediately weakened because he ignores 1996 to 2006 and the impact of the Howard enterprise bargaining reforms. Instead he uses a three-year period in which Labor was in office for half of the time and when the unions were reverting to militancy in key industries, like building and construction. He then says that reformists want WorkChoices which is not true and then offers no evidence whatsoever that the Fair Work Act (FWA) has actually provided any real benefits to working people.

His claim about productivity is nonsense. He relies on quotes from Saul Eslake but Eslake's views were put very differently by The Australian (September 7, 2011) which stated "it made no sense to measure productivity over short periods and there was no statistical data to support assertions that either WorkChoices or the FWA had any discernible influence on the disappointing trend in productivity growth".

The other academic to put a case for the ALP is Law Professor Andrew Stewart (AFR - August 24, 2011). His case also starts and ends with WorkChoices. Why does he exempt 1997 to 2006 when he rejects the calls of business for the system pre-Gillard?

Early in his piece he notes there has been no surge in industrial action. Pity he wrote that before the latest numbers. Pity also that he wrote before the Productivity Commission (PC) published its analysis of the retail sector. And pity he missed the press reports (AFR - August 20-21, 2011) that reported, ministers "have privately conceded that it has become untenable for the Government to ignore business concerns" about FWA. "There is concern in the Government - in the Caucus and the ministry - that it [the Government] is increasingly being seen to have adopted a 'head in the sand' approach to what are clearly emerging as reasonable business concerns…"

The ACTU are really floundering to defend FWA. It has a stock answer to any suggestions of change by employers or political opponents. The mantra has not changed in at least the last 20 years. As an example the secretary of the ACTU, Jeff Lawrence (AFR - September 5, 2011) said that "punishing workers" would not solve the problems in the retail industry; as if anyone had suggested anything other than how to grow the industry and improve poor productivity.

When confronted with a survey by the Australian Industry Group (AiG) Mr Lawrence (The Australian - September 6, 2011) "derided 'bodgy' surveys by employers that used the term flexibility as code for cutting pay and conditions". The next day the president of the ACTU was quoting from the ACTU's latest dodgy survey.

For the Labor Party and the unions a couple of slogans is the best they can do whereas the official statistics show that workers were much better off under Howard than Rudd/Gillard.

Real per capita GDP growth under the Coalition from June 1996 to Dec 2007 was 2.4 per cent; under Rudd and Gillard from December 2007 to March 2011 it was -0.2 per cent. The real average non-farm compensation per employee was 1.6 per cent pa under Howard and -0.4 per cent under Labor.

Labor talks about participation but the Coalition delivered. More people came into the workforce; the Howard government opened the door to employment, and the best that can be said is that Labor has not yet closed it.

Under Howard the unemployment inherited from Keating was halved and struck a long-term low following the introduction of WorkChoices. Unemployment will never get back to Howard's levels under Labor. Under Howard the underutilisation rate was dropped from 15 per cent to about 10 per cent. Under Howard the long-term unemployed steadily got back to work. Under Labor the rate has lifted. Under Gillard young people can't now get a job after work in some businesses because it does not suit the unions. Howard reduced youth unemployment; under Labor it is up and will stay up.

Maybe I have missed some really well-argued, comprehensive, fact-based case that explains why and how Labor can say that the FWA is doing a good job for employees and the economy as a whole. If anybody has seen that, please pass me a copy. I like to read a well-documented case which is the reason I have put my statistics on my blog -- just follow this link.

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