Sunday, May 22, 2011

Broadly speaking: Was Howard’s WorkChoices so bad?

It was 2007, the ALP was about to be swept into power and while many issues were the order of the day, and of which climate change was arguably at the top, industrial relations and the highly polemic workchoices probably defined the campaign most and allowed Rudd to line up with unions on key policy initiatives.

Because much of the criticism aimed at workchoices and Howard was over the top, permit me to recite a number of thoughts I have entertained about the legislation since that fateful election.

In point form:

  • Many journalists, unions, employees and pundits had little real knowledge of IR issues and wage fixing and yet, pronounced themselves as specialists who assured all that Howard did indeed preside over what Rudd proclaimed to be “Howard’s Brutopia”   
  • It was incorrectly assumed that all workers would have zero bargaining power – the worst case in all cases.
  • It was incorrectly assumed that all bosses were capitalist bastards who did not give a squat about employees, and would in all cases impose exorbitant individual contracts upon them. 
  • It was incorrectly assumed that business owners employing highly unionised labour would rather engage in a lengthy battle with unions rather than running the business and getting on with the delivery of goods and services for which they were in business. 
  • Did anyone bother to highlight the fact that Australian Workplace Agreements were around for many years prior, and that almost 2% of workers had signed up… shock horror. In fact, by scrapping workchoices we surrendered a law that had been operative for nearly 15 years, a law made possible by the Keating government when it preferenced enterprise bargaining over arbitrated wage settlements. Thus, the new legislation, Fair Work Australia can now make binding rulings to settle disputes hence, a hybrid version of compulsory arbitration - a return to yesteryear. 
  • Effectively negotiated, Workchoices individual contract provisions made AWA’s less bureaucratic and offered greater flexibility.
  • Unlike the exaggerated notions put forward by unions, ALP scaremongers and even church groups, it would have been unlikely that workchoices would have led to reduced wages in minimum dollar terms or even real terms because the gap between minimum wage and the dole cannot be narrowed. Thus, minimum wage was always going to keep abreast with CPI changes.
  • During the time in which workchoices was operative nearly half a million jobs were created and over 80% of them were full time compared to a much lover full time figure during the preceding government.
WorkChoices committed to the power of the individual, this in my view should be paramount though it run contrary to ALP values about the latter’s capacity to successfully negotiate their own contracts with penny pinching business owners and management. Consequently, individuals were individuals no more. To to shield them from ‘unscrupulous’ employers, unions (the collective) would negotiate on their behalf. If any individual did not conform, they faced intimidation, and bullying and even perhaps physical abuse. David Larkin would not be amused.

In the end, the individual was the loser, much to the detriment of company, the business and the economy.

Workchoices was a political folly not an economic one nonetheless, the former is only true because it could have been sold far better.

Related reading:

Howard and Costello’s Moral Consequences of Wealth & Prosperity

Work Choices is radical; and that's a good thing