The National Wage Review is On: What is the Union Strategy?

Don Sutherland, February 23, 2018

One of the 2 most important dates for workers this year is looming. The National Wage Review for 2107-18 (NWR18) conducted by the notorious Fair Work Commission (FWC) gets under way for real on 13 March. This is the deadline date for submissions from interested parties as to what this year’s increase should be.

This is when we might know the exact detail of the Australian Council of Trade Union’s (ACTU) claim on behalf of all workers. Yes, the claim is made also for all of those workers who are not members of unions.

Of course, we will probably also know how much the employers will say they are willing to accept. From our lived experience we know they will all oppose the ACTU Claim.

Will there be a broad public and industrial campaign in support of the ACTU’s claim for a big increase in the minimum wage at the forthcoming National Wage Review 2018? Or will it be the ACTU’s failed “business as usual” approach in which their senior officers present the claim, supported by a small number of worker witnesses, and then politely argue why it should be accepted in the face of the chorus of opposition from various employer groups against it?

Will the campaign challenge the “broken rules” in the Fair Work Act 2009 that define how Annual Wage reviews should address the issues.? Will the ACTU approach represent a serious challenge to rising inequality? Will it transform the endorsement of “defiance” from a concept to an industrial and social strategy?

These are important question for Australia’s union members and the 80% plus workers who have not yet joined their union but whose standard of living will be determined by the outcome of the review.

4 Reasons why these questions are important?

First, the evidence is getting stronger that wages have been and are still being suppressed to such a point that this is a factor in rising inequality.

This evidence has been publicly discussed for at least 15 months now and led the ACTU to announce in October (check) last year that it would pursue a claim for an increase this year (the 2017-18 Review) to the statutory minimum wage based on the concept of a Living Wage, not a “minimum wage”.

Although the ACTU had not finalised its claim at that time, this idea would envisage a claim that would take minimum pay rates to around 60% of the median wage

The lowest paid would go up to $738 based on a median of $1230 (the data at that time): that’s an $80 a week increase.

Second, a recent media release (18/2/18) from the ACTU (Assistant Secretary, Scott Connolly) complained again about the state of wages in Australia, as it should. Connolly was responding to the latest information from the Australian Bureau of Statistics (ABS) that showed a tiny increase the wage price index, inadequate for what is needed right now.

However, the media release said nothing at all about the NWR18 or the ACTU Claim. Another opportunity squandered for much needed public education about what the ACTU has been on record about.

Then the next day, in a major speech, the ACTU Secretary made only the slightest general reference to National Wage reviews and said nothing specifically about NWR18 or the ACTU’s claim. This is quite surprising.

McManus said, in registering again one of the chief complaints against the Fair Work Act 2009 (FWA09):

“Unions can make submissions on award reviews, and they do. Unions can make submissions to the Minimum Wage Review, and they do. But those roles are marginal.”

In the list of new laws she includes: “provide a living wage for all”. But no elaboration.

Third, the ACTU, its constituent unions, and more importantly Australian workers, are fast running out of time for such a campaign to be developed and for it to have a new and dynamic influence on the wages struggle.

Yes, there is a wages struggle. However, right now the wages struggle is hidebound as a public “debate” that sharpens occasionally when a group of union members hit the headlines in discrete, atomised and bitter fights over wage increases, and other issues, in bargaining for a new enterprise agreement.

This form of wages struggle repeatedly reveals its limitations. As essential as it is, it is not tackling rising inequality and poverty.

The FWC describes the Annual Review process at its dedicated web page for National Wage Reviews: please click here.

This includes the Fair Work Commission’s current timetable that provides a number of dates that could be focal points for broad union and public action, including 9 April when replies to the first submissions are required and “Final consultations” on May 15-16. (The FWC has also published the statistical information it considers necessary to work out what the outcome should be. Please click here.)

Therefore, union members and potential members are entitled to ask, “What is going on here? What is the ACTU up to?”

 Why is the National Wage Review so important for workers?

Under the current broken rules of the FWA09, and the socio economic system in which it fits, workers can get pay increases from any of 4 sources.

The first source is when, “like Oliver Twist” they beg for more and the boss “out of the goodness of his heart” gives them something.

The second is when there is a shortage of the particular knowledge and skills that the boss needs and so she retains or attracts workers with those qualities with higher wages than those previously available.

The third source is through enterprise bargaining increases. However, we all know that enterprise bargaining as a source of pay increases is falling apart and shows no signs of reversal. The FWA09’s “broken” enterprise bargaining rules determine that.

Thus, the pay levels of the remaining enterprise agreements shift closer to the minimum rates in Awards that are themselves determined by the broken rules of the National Wage Review.

The Annual National Wage Review is the fourth source. But, under “the broken rues” and established “strategy” the awarded annual pay increase is always well below what the ACTU claims on behalf of the whole workforce.

That is why previous Wage Review decisions are a factor in establishing the trend to greater inequality.

Because of the decline in the number of enterprise agreements and the decline in the number of workers covered by them, and the reduced gap between wage rates in those agreements and the minimum wage, and the increase in the number of workers dependent on the Wage Review,  the size of this year’s wage increase is critical for workers living standards.

Thus, it is in the interests of both unionized workers with decent enterprise agreements (a declining species) and non-union workers without Agreements, that there is an opportunity to engage very much more in a public campaign in support of the ACTU claim.

A strategy can be devised for the NRW18 that can attract non-union workers into (re)joining their union, and tackle the problem of wages competition that confronts unionised workers with an enterprise agreement on above average (for now) rates of pay.

The ACTU’s medium term vision showed an answer

Some readers will recall that the ACTU announced late last year that it would seek an increase to the minimum wages in this year’s Wage Review that would lead to a “Living Wage”, as the new minimum wage.

It released a report that explained the concept of the Living Wage and its logic for current circumstances.

However, up to the end of January there had been very little to zero education effort to explain this objective, and its great significance for workers, to union members or to the broader working class.

For example, this is confirmed by a quick review of the ACTU’s media releases on wages issues and associated rising inequality. (See my end note.)

Implications … what is the ACTU Executive up to?

I am putting the emphasis here on the ACTU Executive not just Sally McManus or any other specific national official of the ACTU. It is the ACTU Executive, mainly national secretaries of the ACTU’s member unions, that sets the parameters for what McManus and other leaders are able to pursue and promote in the public battle on behalf of all workers.

If there is to be no attempt at a campaign there needs to be a serious and clear explanation as to why.

Because what that means is the ACTU Executive has decided to continue with a failed strategy and, in doing so, to meekly comply with one of the most serious of the “broken rules” of the Fair Work Act 2009.

It is discarding any serious intent to be defiant. “Defiance” thus lives as a word to get a headline that registers a complaint. The encouragement of defiance, as part of every workers’ heritage, does not represent a commitment to a “new” strategy relative to that which has been pursued for the past twenty odd years. It does not commit to a strategy that enables workers themselves to learn, as a combined movement, how to win their battles, and shape their history as their predecessors have done in working class and union history.

In its own way, the most recent media release referred to above says something about the problem.

“The latest wage price index figures show that working people need more power to negotiate pay rises.”

“Working people need more power”? Well, that leaves begging how power is acquired and what it is that expresses the power that is “needed”. Is the ACTU waiting for someone to give “working people” more power? Maybe, they are waiting for a new Labor government to give working people more power? Do they expect that a Labor government will give more power to working people without pressure and power being exerted upon them? Do they assume that union leader lobbying and negotiating skills will be enough power to ensure that “working people” acquire power that they “need”?

Ultimately, the power that working people “need” is the unrestricted right to withdraw their labour. But this “power” is rarely granted, even though it is a human right. Most of all, this power is learned in the doing of it (especially for workers who are not used to grasping it) and that requires a very different strategy to the one that has failed in the past. The more defiant is the “doing of it”, the more it is that workers learn about their potential as a class and the more they attract other workers to support them and join in. This is not a “vanguardist” approach in which leading groups of workers act in heroic isolation without any thought to how their action will attract more into the struggle.

Rather, a “struggle” strategy can be developed in which power is exercised to the extent that is possible, is still defiant and is shaped to make sense to those who are not ready to join in but will do so next time. Power is taken bit by bit, and sometimes the bits are bigger and more decisive.

Above all, the phased increase in the exercise of that power by “working people” pushes the employers and the government and the FWC into a defensive position. A vital part of this is union education: not just through formal classes but in all sorts of ways, including learning and “critiquing” by doing.  The best union education is that where learning is acquired in action developed over phases that attracts during each phase new participants into the struggle. A National Wage Review campaign of this type will make sense to non-union workers and can be structured to appeal to other parts of the population also.

Union Members and Activists … what can they do?

Union members and activists have 2 broad choices. One is the current practice: leave the issue of strategy to the union leaders, the “wise heads” who “know what they are doing”. This includes joining in to support workers who are active in those bitter enterprise bargaining and similar disputes, knowing that as brave and courageous as they are, they are not ultimately a winning strategy for working people as a whole.

Another, is to decide to intervene themselves, individually and in groups, to exercise their rights as union members to set a direction for their leaders to lead from.

The second of these will be welcomed by some union leaders while others will not be comfortable and will push back against it. How to develop that strategy needs to be discussed more widely. There is a lot at stake.

End Note: Recent ACTU Media Releases about wages and inequality