Securing jobs and wage growth: the key to economic recovery - ACTU Australian Unions
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Securing jobs and wage growth: the key to economic recovery

Every Australian can win, if discussions between the government, business, and the union movement address weaknesses in workplace law that started long before the COVID-19 pandemic. Our recovery depends on good, secure jobs and wage growth to support domestic spending during the long climb back from this year’s disaster.

The union movement was left out of the room in 2019, when Industrial Relations Minister Christian Porter was asked to examine the Fair Work Act after the Coalition’s surprise election victory. But with the COVID-19 pandemic destroying jobs and livelihoods across Australia, it was the union movement that showed leadership, campaigning for the JobKeeper and JobSeeker wage subsidies that kept ordinary Australians from falling through the trapdoor into economic crisis.

Scott Morrison couldn't ignore the important role unions and their members play in keeping Australia ticking during this time, and has opened discussions with business and the union movement on the future of industrial relations.

In a video briefing, ACTU Secretary Sally McManus outlined the principles the ACTU is taking into the discussions. First, no worker will be worse off under any changes made to the Fair Work Act. Second, Australia’s economy depends on workplace law that supports secure employment and wages growth.

‘The current set of laws were not delivering for working people long before the pandemic’, McManus said. ‘And they will certainly hold the economy back as Australia rebuilds’.

The coronavirus did not create the problems that threaten to hamper Australia’s economic recovery. These were long in the making. Wage growth has slowed significantly over the past decade. The rise of insecure work means that, before the pandemic, less than half of employed Australians held a full-time, paid job with leave entitlements.

This has had serious impacts on the nation’s economy. Per Capita has found that before COVID-19, underemployment cost the nation $24 billion in lost wages per year, which would have led to $4.3 billion in income tax receipts. Meanwhile, entrenched low wages hamper productivity, with employers lacking incentives to invest in technology and upskill the workforce.

Secure work and wage growth are also two, major drivers of domestic spending. This was already slowing in 2018, before the pandemic hit. The problem is now even more urgent. We know that Australian workers and businesses will not be able to count on two of our biggest industries and biggest job creators for the foreseeable future, with international tourism and international education both on ice.

This means that economic recovery will depend on Australians spending – and who will do that, without secure work, and wages that keep up with the growing cost of living?

In May, before the government announced the discussions, the ACTU put reforms to workplace law at the heart of its proposals for rebuilding the Australian economy after the COVID-19 crisis. This means looking at wage fixing mechanisms, putting the brakes on the growth of precarious employment, and enabling greater worker participation in trade unions.

The measures proposed by the ACTU would strengthen employment law and help set out the frame for economic recovery. Meanwhile, after Prime Minister announced the talks, the Australian Industry Group released a wishlist of reforms that would weaken workers’ rights and wages. On the face of it, there is little common ground here. It will take the discussions themselves to find out what the government, business, and the union movement can agree on.

It is in the interest of all Australians to fix workplace laws that undermine working Australians and will undermine the nation’s recovery from the COVID-19 pandemic. 

The ACTU knows that Australia desperately needs a plan for economic reconstruction.  We are yet to see any sign of one from Scott Morrison.

It needs to be a visionary strategy that creates secure, well paid jobs, revitalises our manufacturing base with a focus on new industries and technologies, invests in social and public infrastructure that leaves a legacy for future generations and embraces the challenges and opportunities offered by renewable energy.

We will be laying out our plan for a Fair Australia as we enter these discussions.

Together we are stronger.