Title : Strike action 'near extinct' as wages stagnate, think tank says
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Strike action 'near extinct' as wages stagnate, think tank says
Research suggesting curtailing of the right to strike is partly to blame for record-low wages growth has been slammed by a business lobby group.
In the wake of the Fair Work Commission's decision to suspend a strike by Sydney train workers, analysis by the progressive think tank The Australia Institute has revealed a 97 per cent decline in the frequency of industrial disputes since the peak in the 1970s.
In 1974, more than 1,000 days across the year were lost to disputes per 1,000 workers.
In 2007, that number had dropped to just five days lost per 1,000 workers and the average over the past decade is 14 days.
Jim Stanford, the head of the think tank's Centre for Future Work, described the decline as "shocking".
"Strikes have become almost non-existent in Australia's economy," he told the ABC.
While acknowledging numerous factors behind the reduction, Dr Stanford said the "incredibly far-reaching restrictions" on industrial action were one of the most important.
"Australia has some of the most restrictive rules regarding work stoppages of any industrialised country," he said.
"We've seen time and time again the industrial umpire and the regulators stepping in to limit or restrict or prohibit work stoppages, which were rare to start with."
In the case of the Sydney train strike, the Fair Work Commission found the industrial action threatened the welfare of part of the population.
University of Sydney labour law expert Shae McCrystal said the decision raised concerns about the "narrowing" of the circumstances in which workers can legally strike.
"The permissible range of legal protected action has significantly diminished and will only do so further," Professor McCrystal.
The centre's report argues decisions, including last week's, "have contributed significantly to the erosion and near extinction of organised industrial action in Australia's economy".
Wages linked to industrial action
The report points to a "close statistical relationship" between the decline in strike action and slowing wages growth.
"Over the post-war period, every decline in the frequency of work stoppages of about 60 days per 1,000 was associated with a one percentage point deceleration in wage increases," the report said.
Dr Stanford said the link was a "no-brainer".
"If workers don't have the ability to stand up to their employers and say we want more wages or else, then employers don't feel any sort of compulsion to take their wage demands and other demands seriously," he said.
The Australian Chamber of Commerce and Industry slammed the report, with chief executive James Pearson labelling it "activism dressed up as research".
"It seems the Australia Institute has decided the conclusion it wants and then it's gone looking for a spurious correlation to support it," he told the ABC.
"We've had long periods of reduced strikes and high wages growth in Australia."
Independent economist Saul Eslake was not surprised by the Centre for Future Work's finding, but cautioned that correlation did not imply causation.
"There is, in any event, much too long a lag between the decline in strike activity and the slowdown in wages growth for the former to be a major cause of the latter," he said.
Mr Eslake reasons slow wages growth, in Australia and other advanced economies, is "partly attributable" to a decline in employees' bargaining power.
Professor McCrystal agreed that a combination of factors was behind wage stagnation but thought the report made a "strong case" for the contribution of falling industrial disputes.
Weighing up the costs
The Fair Work Commission's decision on the Sydney rail strike took into account a threat of significant damage to Sydney's economy, but Dr Stanford said other costs needed to be considered.
"You have to take that into the context of what happens if there's no bargaining power on the workers' side and wages as a result are very stagnant," he said.
"That situation creates economic costs as well — very big ones."
But James Pearson said strikes did not help the workers' situations.
"We need conversations, not confrontations," he said.
"If we're serious about supporting growth in employment, we need to increase the demand for labour and that means supporting businesses."
Prior to industrial relations reforms in 1993 all strikes were against the law and Professor McCrystal said a return to more unlawful action could be on the cards if the right to strike was "regulated away".
"Stagnating wage growth may be a factor in a shift in the way working people and unions view the law," he said.
While Mr Eslake said there might be good reasons to look at the balance of power between workers and employers, he warned against a return to the "industrial militancy" of the 1970s and early 1980s, when some workers secured wage increases well above productivity growth.
"It also led to what was in Australia called the 'real wage overhang', which in turn led to a loss of competitiveness, and to increased unemployment," he said.
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