The government promised to get wages moving before the election. But the budget shows real wages falling significantly this year due to high inflation. Is that another “broken promise”?
Some in the media suggest so. “You went to the election promising real wage increases, and again the budget says that’s not coming any time soon,” said David “Kochie” Koch to Treasurer Jim Chalmers the morning after the budget. “Jim Chalmers admits electricity prices will soar, real wages are going nowhere for the next two years,” complained Perth’s Liam Bartlett in an interview with him.
And the opposition agrees. In his budget reply last night, Peter Dutton contrasted Labor’s preelection rhetoric on wages with the budget figures. And the opposition treasurer called it a broken promise yesterday morning. “It promised lower electricity prices, it promised stronger real wages, it promised dealing with cost-of-living pressures. It’s not delivering on any of those promises.”
Except Labor is doing something about wages. It’s giving unions greater bargaining power by re-introducing a form of multi-enterprise bargaining. And the opposition and parts of the media hate it. The government’s industrial relations changes “will lead to widespread strike action across the nation and be devastating for the Australian economy”, chuckling simpleton Michaelia Cash opined yesterday. It would “create a toxic industrial relations environment”, said the opposition treasurer.
“Of all the productivity-sapping threats posed by the Albanese government, a return to industry-wide wage bargaining to satisfy the demands of the ACTU has the most potential for harm,” The Australian belched yesterday. And at the Financial Review, they’re incandescent with rage, devoting multiple op-eds pieces to attacking it.
All this tells you is that for the first time in a decade and longer, we might actually see an industrial relations reform that will deliver higher wages growth, and it terrifies business and its media cheerleaders. “The Business Council wants Australian workers to have more money in their pockets,” insisted BCA head Jennifer Westacott in one of the many AFR attacks. Except, the past 10 years — hell, a lot longer than that, but let’s not get historical — prove that business does not want higher wages for workers and in fact will try to impose lower wages if they can.
That’s why the profit share of income has surged at the expense of the wage share, especially since around 2017.
That’s why labour productivity increases have been far ahead of wages growth in recent years.
That’s why, even with unemployment at 3.5%, wages growth is stuck at a pitiful 2.6% while corporate profits surge off higher prices.
The one area where the government is wimping it is in its pretence that the industrial relations changes won’t lead to more strikes.
Yes, they’ll lead to more strikes. That’s the whole point — businesses are not going to hand over pay rises out of the goodness of their hearts. They’ll need to be fought for. Greater bargaining power for unions and workers will make that fight a fairer one.
In the June quarter, the number of days lost to industrial disputes per thousand employees surged to 10.4 — the highest level for more than a decade. How does that compare to the 1980s? The current ABS series began in 1985 — between then and 1990, the average was over 55 days a quarter. And that was during the Accord years. Things were dramatically more fractious before Labor was elected in 1983.
We’re not going back to the ’70s and ’80s, despite what business and its mouthpieces say. But we might be going back to higher wages growth. The squeals from the corporate sector suggest it’s a real chance.
