Labouring the Point

Shaun Carney sums up the intended result of the Howard Government’s IR reforms:

In practical terms, the changes would be likely to drive wages down at the lower end of the market while also increasing the number of people who can be employed. In that sense, the consequence for the economy would be to extract greater net value from the workforce by working a segment of it harder for less money.

The judgement of most economists and the Government is that demand right now is so high that there aren’t enough workers and machines to meet it. In the short term, creating a larger pool of workers who can be recruited on low wages will help ameliorate that problem with unmet capacity, even if it means that a number of them will be merely churned through the workforce, thanks to the abolition of unfair dismissal laws.

Remember how the government trumpeted the fact that real wages had risen under Howard – in contrast to Hawke/Keating?

And here’s a taste of what things are like in the existing labour market at its bottom end:

Employer groups are always arguing that they should be able to negotiate pay and conditions with individual employees (a situation the Howard Government is doing everything it can to introduce), basing their case on the risible pretence that the parties come to the negotiations on an equal footing, whether or not the worker meeting with managers speaks halting English or reads with difficulty.

If they were equal, presumably the anonymous drones of the service industry would have managed to capitalise on the demand for their labour rather than slaving away for $12.30 an hour.

And if, as Alan Wood thinks, the years of fast growth are behind us, and the Government’s sole meaningful response is to ratchet down the price of labour, with their Senate majority, it’ll be harder and harder for Howard and Costello to escape responsibility.