I am reluctant to get into a big debate because the issue has been done to death (obviously here and definately elsewhere), but out of respect I will respond.
Sarah said:
1. "flexibility" and "productivity" are some of the buzz words of the reforms. They remain that until they are proved or disproved by evidence and qualified studies.
Well the reforms certainly give flexibility. in fact thats what they are all about. Currently many industries are tightly controlled by awards and regulations which are often not suitable to either party. To give you an example, in my casual job, I had a mate who wanted to work many hours. He finds it hard to work during the uni semester because of workload, so he wants to take any shift he can get during holidays. On a particular week he was already working 38 hours, and I asked him if he could take one of my shifts. He was keen to do it (without overtime) howevor it would have been illigal to not pay him overtime, and the employer was not willing to pay him overtime. There are many more examples, but the main point is that it encourages individual contracts which can be specific to employers and employees.
Productivity growth is something which has been seen in nations who have introduced similar reforms, so it is a fair assumption to make. The process for which this happens, is that it encourages a mutual bargaining process whereby employees can achieve wage increases, howevor by bringing something themselves to the table. Union power has traditionally seen wage increases with little or no productivity increases, and the notion of collective bargaining provides no individual incentive as your wage is determined amongst a group, and its harder for personal action (i.e. working harder) to impact on wage levels.
2. It would suggest a need to revise how employees are remunerated. Would these new reforms address this? I don't know. If you think that we should be remunerated based on how hard individuals work, then paying p/hr may not be the way to go for all industries.
well im not sure what you mean by this, but the plan of these industrial relations reforms are to bring in flexibility in wage determination, in particular with individual contracts. Pay per hour is not something that will stop, but employees will now have the flexibility to demand more money when they have been proven to work harder. For example, could you imagine working at mcdonalds, or a supermarket and asking for a wage rise? Individual contracts would link the two a lot more directly, so the whole "working harder" concept doesn't come in terms of "piecework" but rather show your work ethic and get a pay rise.
3. Looking at Aust's IR history, when Labor was in power in the 1980s and early 1990s, they had already started the process of labour market deregulation. Did these meet the interest of unions at that time? Not always.
Well the thing about labor was this. we had a massive problem with real wages. It was the single biggest cause of unemployment in australia, and really labor had no choice. They had to force wage restriction agreements upon the unions in order to merely survive as a government. Second to that, Paul Keating was the mastermind behind the Industrial Relations act, and working nation and his union interests within the ALP were less than the rest of his colleagues.
4. Only overseas countries I've heard mention both in this forum and the media is N.Z and USA. These countries have had their own challenges and experiences. Can't really comment on this point.
Well NZ is the best example because of their geographic and economic similarities to australia. Surveys indicate that 70% of NZ'rs are happy with the reforms. More importantly, their economy and labour market has shown that the reforms are positive. The USA is not a good example because they are a country with a totally different situation to australia. Firstly they have far greater inequality than in australia, and their reforms were a lot more harsh. In australia we are going to have the fair pay commission which will still determine award increases. Probably the other good example is to look at european nations. Scandanavian nations, and the UK have in place similar reforms to us, and have the lowest unemployment levels in the whole of europe. Germany which has a system similar to what we are moving away from, has unemployment of over 10%.
5. Ok well if as you've said, the biggest cause of poverty in Australia is unemployment, well I ask "what's the biggest cause of unemployment?". Other variables need to be considered. It's not just a 2 way process. Oh and how will reducing real wages enable the unemployment issue to be tackled?
Don't need to reply, just thought you might like to consider the above
Well the biggest cause of unemployment would be either macroeconomic issues for which we are not suffering atm, or structural unemployment issues which is a bit of a problem in australia. That being said we are at the lowest unemployment in over 30 years so unemployment is not a big deal, but it can probably go lower. But the point is not that we need to fix a current unemployment problem now, but more so that we need to address future problems. This is what these reforms are going to do. Think what happens when all of our parents retire? What happens to the skills gap?
Abnormally high real wages always causes unemployment because it makes hiring staff too expensive. Also think of how you would be as a small business and you are thinking of taking on a new employee. Your gonna be far less likely to hire when you have to think of redundancy payouts, and the like. In fact in a MYOB survey 1/3 of small business employers said that if the new reforms were in place they would think of hiring staff. This is an immediate impact. The current system is costing jobs.
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Just as a final note, I think I will have to leave it at that because I dont have the time or patience to keep going haha...
Feel free to write in response, but you may not get a reply because ive done this topic to death lol.
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