Greg Jericho 

Meghan gets it. Workers still need unions

Falling wages growth in Australia shows how badly we need unions to bargain effectively on behalf of workers
  
  

Meghan Markle
Meghan told Oprah Winfrey: ‘In my old job there was a union, and they would protect me.’ Photograph: CBS

You generally don’t expect a member of the royal family to be the loudest advocate in the world for union representation, but so it was this week.

The Duchess of Sussex, Meghan Markle, told Oprah Winfrey in her interview about the problems she had getting any response from the royal family, and being stonewalled by its HR department. In exasperation, she said: “In my old job there was a union, and they would protect me.”

Indeed.

As a member of the Screen Actors Guild, she has experience being in a union that’s not afraid to go on strike or support fellow workers when seeking better pay and conditions.

It was a quite remarkable statement on how lacking union representation leaves you subject to the whims of your employers.

Meghan gets it.

So too does Anthony Albanese who this week was also doing his bit to support unions by showing solidarity with striking workers at McCormick Australia’s factory in Clayton, tweeting: “Now the workers have gone on strike. Good on them.”

It’s rare to see politicians, even Labor ones, cheering workers going on strike. And yet industrial action is vital for worker power – without it the ability to protect workers, or bargain for higher wages, is greatly diminished.

But alas, that has been the case for over a decade now.

This week the latest industrial dispute figures showed that 2020 had fewer days lost to industrial action than any year on record.

Graph not displaying properly? Click here

Now that is not surprising given the pandemic, but it is also not surprising because six of the seven lowest years for strikes have happened since 2013.

And also unsurprisingly, since 2013 wages growth has continued to fall to the point that wages are growing at half the rate needed for the Reserve Bank to consider raising interest rates again, according to comments made by the bank’s boss at the AFR business summit this week.

Governor Philip Lowe said that “even before the pandemic, wages were increasing at a rate that was not consistent with the inflation target [of 2%-3%] being achieved” but now “we are a long way from a world in which wages growth is running at 3% plus”.

How far away? He suggests no sooner than 2024.

At that point, it will have been over a decade since wages have grown by more than 3%.

The fall in the number of strikes and wages growth is not a perfect correlation, but ignoring the impact of policies designed to limit union power – including the ability to go on strike – is to live in a fantasy land where employers and employees have equal bargaining power.

WorkChoices revealed just how much of a joke that fantasy was, and to be honest, the Fair Work Act did little to restore reality.

It did little to increase the power of unions at the bargaining table, yet Labor’s IR policy (as ever) was still criticised by employers and the LNP for allowing the “pendulum” to swing far too back in favour of unions.

It didn’t and the declining number of strikes proves it. And so too does the falling wages growth.

As I noted last month, we will likely not see wages grow above 3% again until the unemployment rate is below 4% – a level that we have not had for over 45 years.

Three per cent wages growth used to be taken as given. Now anything above 2% is considered excessive. And the Morrison government is doing all it can to keep that in place – including ensuring union representation is limited and as impotent as can be.

For even if unemployment does fall to 4%, employers will increase wages only if workers are able to bargain for higher wages.

And unions have consistently produced better wage growth for workers than produced by non-union enterprise agreements.

That we are so far from wages growing by above 3% suggests that we need much more stimulus, by both the government and the RBA.

But it also means unions need to be able to bargain effectively on behalf of workers.

 

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