A holiday pot pourri – unions, jobs and education

I saw this in The Australian (on-line) front-page today – “POLL: Do unions have too much power?” So the campaigns are emerging: deficits, debt and union power. Seems like we are back in the 1970s when the conservatives last ran the union power campaign. The topic is apposite given the Government’s reaction last week to union requests to eliminate some of the nasty elements that remain from Work Choices. I laughed when I saw the poll – who are they trying to kid. Anyway, the current Government is playing hard cop with the union movement exploiting the lack of capacity of the latter to fight back.


In the 1970s unions covered around 54 per cent of the workforce and could take industrial action for just about anything. They made an art form out of the “environmental strike” and saved natural resources (Myall Lakes) and cultural artifacts (The Rocks) which showed some semblance of being enlightened. But they also misread the changes that were going on in the economy and society and found themselves losing traction in the policy debate. It took the draconian Work Choices to ignite some real unity again albeit with a much diminished membership. This is why the Government can largely ignore them. Sadly.

In the today’s Melbourne Age, the editorial chose to cover how Gillard spells out the limits of union influence, which follows the same theme about union power. The writer argued that:

Times have changed, however, and Deputy Prime Minister Julia Gillard’s speech last week to the ACTU conference delivered a blunt message to the union movement that it can no longer expect to call the shots when Labor is in government. In a week of several politically significant events, this one could mark the moment the Labor Party publicly shook off the shackles of its union origins.

I wonder if the Government (that is, the Australian Labor Party) will also stop accepting money from the unions at the next election.

The source of the stand-off is the decision to keep the Australian Building and Construction Commission (ABCC) which was a particularly pernicious initiative of the previous federal regime. I support a principle that says that all workers should be dealt with consistently by any industrial laws that are put in place.

The ABCC fundamentally violates that principle by allowing among other things building workers to be fined for refusing to testify against their colleagues. The right to silence no longer applies to building workers while still applying to all other workers. More disturbing if a worker refuses to be interviewed – reflecting the fundamental right to act in one’s best interest – then the ABCC can jail them without any due process being followed.

The ABCC and all its functions should be scrapped immediately and if building and construction workers are acting illegally then that should be proven under existing criminal codes and appropriate penalties given.

The editorial notes that the Government thinks it can disregard dissenting “left” elements because “they are well aware that the union movement’s options are limited – to which other party would they transfer their allegiance?” This is the old argument the Labor Party has used for years as it has become increasingly irrelevant in terms of protecting the interests of workers.

I recall a private meeting I had with a senior labor party shadow minister at the time (early 2000s) who came to consult me about macroeconomic policy. It was clear they were never going to jettison the neo-liberal view of the budget and debt etc and he maintained that the opinion polls would kill them if they did. I noted that leadership wasn’t about following opinion polls but was actually about pushing the polls in the direction you wanted them to go. He also said that the left of the Labor Party were never going to desert it when it came down to the crunch because there was nowhere else to go! I noted at the time that this was a demeaning way to treat your support base as you screwed their welfare.

At least the Labor party realise that union power is a function of the union coverage. Less than 20 per cent of Australian workers are now in unions and less than 14 per cent in the private sector. The unions have rendered themselves largely irrelevant to a large number of workers over the years – first, by missing the importance of the rise of the service sector, second, by ignoring the unemployed during the 1980s and 1990s such that when growth did return and official unemployment fell very few of those persons could see any purpose in joining up.

The unions also didn’t provide any particular appeal to the working youth in casual jobs. There are other reasons for the demise of the unions – some of which date back to the period of the Accord under Hawke when the central deals done between the government of the day and the ACTU undermined the capacity of the shop floor officials to directly bargain for their member’s best interests.

But, clearly, a large part of the demise of the union movement has been the sequence of anti-union legislative initiatives mostly under the previous regime, but some under Hawke and Keating.

Anyway, the beat up that News Limited is starting on union power will gather in pace and it won’t be long before the Opposition are mixing it in with their debt screeching.


Meanwhile, the new Employment Participation Minister Arbib says it’s all about jobs, jobs, jobs. He told the press after his sudden elevation that he would do:

“everything humanly possible” to keep Australians in work … Everything that the government has done in response to the global financial meltdown has been about keeping people in work … For me to be at the pointy end of the debate – jobs – is an honour. For people who join the Labor Party, jobs and keeping people employed is what it is all about.

So you may wonder why there has been very little attention focused on actually creating jobs. I wonder about that everyday and agree with the previous Treasurer that there will be less to show for the deficit spending than there should have been. Not that he can talk about leaving any positive infrastructure legacy to the Australian community, especially as he presided over easy times (growth!).

I actually think this is the greatest failing of the current government. On their own estimates they aspire to the unemployment rate rising to at least 8.5 per cent by the end of next year. That shows a lot of care for the unemployed. Everything “humanely possible” includes introducing large-scale public works schemes to soak up the unemployed. I would formalise that and introduce a Job Guarantee. When you hear the current government say their priority is to everything possible to keep us in work, just think of the bird. I do, regularly. I see that President Obama also is a skilled user.


Meanwhile, there is a dispute growing that the Government’s changes to student support income changes should be modified. I actually supported this initiative because the policy change was targetted to cost only those children from well-off families who have been enjoying upper-income welfare for too long courtesy of public spending.

I will write a full blog one day on how the move to eliminate tertiary fees by the Whitlam Government in the early 1970s was one of the biggest transfers of income to the rich that a government could aspire to initiate. It is one of those typical left arguments that equity in education demanded that higher education be free.

The free education argument is based on the advantages society get from having everyone educated. While this certainly applies to primary and secondary school participation, the case is weak at the tertiary level. Most of the returns from the extra (tertiary) education go to the private individual receiving the education in the form of higher salaries, better access to employment, and higher status. Society gets very little more broadly in comparison to having most people finish primary schooling.

If that is the case, why would we want to subsidise the ski holidays of the rich to provide “free education” to their children who will only use the education to extend the inequity in the distribution of income.

The flaw in the policy was also that the poor kids do not go to university because of the fees. The basic point is that the poor kids do not even finish high school and are therefore not in a position to choose at the end of high school as to whether they can “afford” to go to university. When we had full employment – the free university policy meant that poor kids in low wage jobs would be paying taxes while the rich kids would be getting a government handout (free fees) and extending the income differentials over their lifetimes relative to the low wage kids.

With persistent unemployment which impacted disproportionately (and overwhelmingly so) on poor families and their children (there is strong evidence of intergenerational disadvantage arising from long-term parental unemployment) meant that the inequities arising from the disproportionate participation in university education became even worse.

The overwhelming evidence is that over the last 30 years, participation in tertiary education has not become proportionate across socio-economic classes. There has been some small changes in participation by poorer families but not a lot. Tertiary education is still the privileged domain of the better off.

The challenge for the Government is to make sure public schools – particularly early childhood education and primary schooling in disadvantaged areas receives huge boosts to their capacity to deliver high quality education to the kids of poor families. I don’t sense that is on the horizon at present. The school funding model which overwhelmingly favours better off private schools should be restructured.

If parents want to send their kids to private schools then that is their choice. But private means private – absence of public. I do not support any public funding being provided to private schools. Not a $!

Of-course, the Opposition thinks that the Student plan is unfair according to today’s Melbourne Age. They want to retain the government handout to well-off families. Why would we be surprised by that!

And … finally … footy

And given this is a public holiday in Australia – can you believe it – 2009 and we celebrate the Queen of England’s Birthday – I am leaving my blogging activities at that for today!

Besides, the only other news at present is that Barry Hall brain fade costs Swans – again!

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