Changing the Rules: new powers for workers, or for institutions?

In this podcast I discuss some clues about behind the scenes discussions between leaders of the ACTU and the ALP. Right now, behind the scenes meetings are discussing the new industrial and workplace relations rules that might be introduced by a new ALP government. This activity will continue right up to ALP National Conference in December, and afterwards.

Our focus is on a recent speech by ACTU Secretary Sally McManus, and a recent interview with ALP spokesperson for Workplace Relations, Brendan O’Connor. These provide some clues about whats happening now.

We also discuss: is this something that activists in the Change Rules campaign should discuss and speak up about?

Inequality and wages repression in Australia: workers’ experience is confirmed

Part 1

The latest Journal of Australian Political Economy (number 81) was published last week (click here) and reported in the Sydney Morning Herald on Saturday (click here).

This new issue provides an Australian explanation of the connections between wages repression and inequality, led by material from a symposium on this topic organised by Jim Stanford, from the Centre for Future Work, and are about “causes and consequences of the decline in labour’s share”.

Union and broader anti-poverty and social movement activists should be reading and discussing this material. It brings together a lot of stuff that has been treated to some extent, but superficially, in the daily media (mainstream and social), and also some that can be found in the ACTU and other progressive submissions to the National Wage Reviews.

The Introduction and Overview is a joint effort from Australia’s great political economist and activist, Frank Stilwell, and Frances Flanagan of United Voice (the union). They introduce and summarise all of the articles that follow.

The summary suggests that the articles reinforce widespread experience and shared data about the decline in labour share and its relationship to rising inequality, and provide new info and insights. I was not entirely convinced that we would get much insight on the “cause” of reduced labour share and rising inequality. There is no mention of exploitation in relationship to “labour’s share”, and precious little on profit.

The focus in this issue of the Journal of Australian Political Economy is on “Labour’s declining income share and economic inequality in Australia”.

Jim Stanford’s is the first and flagship article. He explains what “labour share” is, how it is measured, and what’s been happening to it. Except for a couple of important points (see more below), the exploration of “labour share” is quite meticulous and certainly enriches the capacity of labour movement activists to win debates about rising inequality.

“Labour’s share” of new wealth produced (GDP) and total national income (similar but not quite the same) is measured in Australia using data collected by the Australian Bureau of Statistics. All of this data is publicly available and free of charge at the ABS website. In this total data the other shares go to corporations, small employers and the self employed, property owners, and government.

First, Jim establishes that, without doubt the labour compensation” (that is wages plus superannuation and workers compensation paid) share has steadily declined from the mid 1970’s highpoint onwards. And, further, that this translates as a consequence into downward pressure on personal income.

There are up and down blips along the way but the decline is steady, and is supervised by both LNP (right wing, pro-employer) and Labor governments. The Hawke Labor government (starting 1983) is marked by steep decline in the “labour share”. There are 2 good graphs that show this. There is a sharp fall again after the 2008 economic crisis – inherited at the time by the new Rudd Labor government – that then rises from a low level before falling to its current extremely low level since the current LNP governments.

Second, since the mid 1980’s there is a steep fall in the cost of labour to employers, again with a couple of blips along the way.

Third, and this is a big one: real productivity increases steadily and is much higher than both of the 2 measures of “labour compensation” that Jim uses.

Fourth, continuing his demolition job on those (especially employers and their cheerleaders) who wish to deny the reality of the decline in labour share, Jim presents and explains the data about inflation and prices increases, again using 2 measures. Again there are blips, price rises and falls are more volatile, and he integrates these into the story of what is happening to the “labour share”.

Fifth, we have his neat summary: since the mid 70’s there has been an 8% fall in the “labour share” and a 7% increase in the share going to corporations. The shift away from “labour’s share” works out at about $150 billion per year. The share going to small business and self employed falls by 4%.

Finally, Jim compares what’s been happening in Australia with 25 other developed countries. He shows that what is happening in Australia is widespread but not universal. In one third of those 25 countries the “labour share” has been stable or increasing.

Thus, in reference to the “cause” of the problem Jim puts primary emphasis on institutional and policy pressures against workers and their wages. There is nothing about the intrinsic dynamic of capitalism.

Jim concludes that “economic growth alone will (not) ‘lift all boats’ and (will not) automatically ‘trickle down’ into material improvements for working Australians.”

From Jim’s material you can pin this down further: “Trickle down” under Wayne Swan (the Labor government’s Treasurer 2007-2013) and other Labor leaders has been almost as much a mantra, and a failure, as it was under the LNP’s Costello, Howard, Hockey and Morrison.

Labor, as a potential new government in 2019, will have to do much better and different than the ones that have preceded it. There is no sign that Labor’s leaders are up for that.

Part 2

What makes all of this useful? After all, as one Facebook friend said to me, correctly in my view, workers like him don’t need academic research to tell them that their standard of living is under pressure and falling; that their jobs are not, when it comes to wages etc, jobs they can rely on.

There is much truth in this, even more so when workmates are agreeing with each other and then thousands and tens of thousands attest to the same experience.

However, there are lots of workers who are not convinced and / or do not yet care, superficially at least. It is a part of winning the struggle to improve living standards to have the more detailed information and explanation that is available to to confirm and reinforce and, perhaps add to, what the majority know from experience.

This material helps to win workplace level debates (not just public media) that convince more workers to join in the struggle and to join in more vigorously. Further, it can provide insight for the union movement to develop a much better strategy than it has been using in the last 20 years.

Clearly, an industrial strategy (core business for unions) that accepts the broken rules (union practice since 2008) is not working; enterprise bargaining has been destructive for everyone, even for those who have had some wins under it, and the decline in labour’s share coincides also with a decline in union density and the decline in strike based struggles.

Now, some remarks about what I think is inadequate in Jim’s article.

The concept of “labour share” is actually a superficial way of describing what the “labour share” is all about. The labour share is a measure of exploitation. Exploitation is the core rationale for worker combination and unionism. It works like this. The “labour share” is a proportion of the total wealth produced (however it is measured and who by). But the total wealth produced is entirely dependent on the labour carried out by the workers who receive the “labour share”. The workers only get a part of the total they have produced. The “profit share” itself does not produce new wealth. The total surplus after the “labour share” is extracted, “stolen” sort of, appropriated, “taken” by those who have not produced any of it, from those who have.

Labour compensation therefore exists in relationship to profits. What’s happening to the “labour share” cant be fully understood without fully understanding what’s happening to “the profit share”. The continued downward pressure on wages does have a perverse logic in relationship to profits. There must be something going wrong with profits to require downward pressure on wages. Therefore, what is going wrong?

Jim treats this relationship quite shabbily and, therefore, amid all of the good stuff, he does not arrive at any satisfactory explanation about why both sides of government must help employers push the “labour share” downwards. He cannot describe the “causes” of the problem and that leaves him short on what the strategy could be to deal with it.

Let’s check this point in another way. At the start of his article Jim refers to a speech made by Philip Lowe, the Governor of Australia’s Reserve Bank, back in 2017. In that speech Lowe expressed concern about a low pay crisis. He repeated that in June 2018 in a speech to about 1000 manufacturing employers organised by the Australian Industry Group.

We can say this for sure: if you asked those 1000 odd employers what their prime obsession is, the answer would be profits. In their heads, listening to the Governor, they would be thinking through this question: “What does his message about wages mean for my profits, especially my profits relative to the capital I already own?”

This is the real world that workers must confront.

What is lost on the Reserve Bank Governor (at least in public), but not to employers, is that wages can only be understood properly in relationship to profits and the fixed capital that the labour (paid for with wages) brings to life to create new wealth, including those profits. (Among other things you might have noticed that he suggests workers ask for more, I guess just like Oliver Twist, and that employers should give them something. He does not call for industrial struggle.)

Its a worry for our movement when Jim and so many other labour (and environmental) economists make the same mistake. I look forward to reading the other articles to see if this mistake is remedied.

If we know what is happening to profitability we get a clearer sense of why there is a long term downward drive on wages. We are then truly analysing the problem and opening up the prospects of a strategy to deal with it.

Some thoughts on “the right to strike” and the Change the Rules Campaign – Part 2

The “right to strike” versus employer opposition and Laborist naivete

The “right to strike” is one of two (see below) demands that would change the “balance of power” towards working people in a “fair dinkum” way.

The FWA09 restricts workers’ right to strike so severely it is almost meaningless against an array of powers provided to employers to control grievances, disputes of all kinds, industrial award changes, and enterprise bargaining. In effect, the FWA09 denies the “right to strike”.

The right to strike is the countervailing power to the employers’ unrestricted right to withdraw their capital or to transform its use from productive activity to non-productive forms of profiteering, or to re-locate it in another country.

In struggling for a genuine “right to strike” the labour movement is seeking to change a law that a Labor government established in 2009, and that its union leaders consented to. At that time, most activists in that great struggle went to sleep, believing that what Labor was delivering was adequate. Those who did try to explain the serious shortfalls of FWA09 were criticised (not “team players”) and marginalized. That minority have now been proven to be correct.

There is a lot of other detail, also quite important, that will be contested terrain in the months ahead but also perhaps more amenable to agreement. For example, in enterprise bargaining FWA09 empowers employers to use just a few workers (who may not even work under the proposed agreement) to create an enterprise agreement that will cover many other workers who do work under the Agreement. Such enterprise agreements reduce wages, conditions and rights against previously established standards. Also, agreement might be reached to restrict or prevent employers from taking on workers as “self-employed”, individualized workers to drive down wages and conditions.

Laborist discomfort with the “right to strike”: tensions to emerge

Again today, not everyone is comfortable about changing the rules to enable an unrestricted “right to strike”. Some, especially in the parliamentary wing of the ALP  will argue that this change will harm the ALP’s election prospects. They also have some supporters in the leadership of the union movement, at both peak and mid-levels.

Generally speaking, they are comfortable with a minimalist programme of change to the FWA09, one that does not upset the employers or the voting public too much. They believe that the antagonisms between workers and their unions on the one hand, and employers on the other, are not fundamental or severe and can be managed with minimal conflict.

Instead, the minimalists prioritize more power to the Fair Work Commission (FWC) to arbitrate disputes, some modest rights for unions to access workplaces and create disputes for arbitration, and tougher limits on employers using their “lock out” and “termination of agreement” powers in enterprise bargaining.

It should be noted and discussed that the recent and important ACTU pamphlet, “The system is broken- Big Business has too much power”, does not mention the “right to strike” issue in “changing the rules”.[1] Restoring stronger arbitration power to the Fair Work Commission does not give more power to workers.

Usually, the advocates of minimalist and technocratic change, will invoke “pragmatism” as the logic for this approach.

But really, their “pragmatism” is the height of “naïve idealism” because it leaves fundamental employer power intact and assumes that employers will not take advantage of that, and that workers’ power is not necessary for the FWC to treat workers fairly. The minimalist approach assumes that workers themselves cannot exercise their power democratically and effectively, and therefore cannot give their unions more power.

In the real world, a more fundamental reform programme is necessary. Fundamental reform enables a more decisive shift in the balance of power towards workers and their unions at both workplace and industry levels.

The unfettered right to strike is the most important element of reform, including in Award based bargaining (see below).

Direct strike power to workers enables workers, including through their unions, to do what unions were originally formed to do: limit and prevent the employers’ use of the competition threat to freeze and drive down wages, conditions and rights. It gives effect to the democratic idea that workers themselves, in their unions or in other types of combination, should be enabled to exercise their potential power against the powers of the employers. Thus, workers themselves are more in charge of their present and future.

Also, it brings Australia into real alignment with agreed ILO minimum standards on workers’ rights to organise and bargaining collectively.[2]

Bargaining rights: enterprise bargaining, “supply chain bargaining” and Award bargaining

In some union discussions “supply chain bargaining” appears to be the multi -employer bargaining that is quite popular. As one form of “multi-employer” bargaining it is not objectionable, provided its serious limits are not ignored or glossed over.

In a “supply chain” the focus is on a group of employers who are in “cooperation” with each other to deliver a product or a service to its ultimate customer. However, first there is usually one employer who is the main controller of everything else in the chain. Also, each employer link in the chain is likely to be in competition with an employer who is not in the chain. The competitor not in the supply chain might like to be and can offer lower wage costs as the competitive edge to get into it.  Or, the competitor might be in a competitive supply chain able to deliver the same or a similar product to a similar or the same type of customer at a lower wages standard.

Therefore, there are real limits on how “supply chain bargaining” deals with the problem of the downward pressure on wages etc that is created by uncontrolled competition between employers in the same industry or type of business, nor how it deals with the 21st century reality of global supply chains.

On the other hand, the enabling of a new form of Award based bargaining (that includes a “right to strike”) is a big step toward limiting, maybe preventing in some circumstances, the employers’ competition power.  How changes to Awards are processed these days is a big part of the broken rules of the FWA09.

Every effort should be made to bring together experienced and new worker activists to discuss how to advance the fundamental and comprehensive approach. Those in the parliamentary Labor Party and unions who seek, as they have before, to dilute proposals to establish a legal “right to strike”, can be challenged and pushed back.

Other significant factors that shape this struggle for genuine and fundamental strengthening of workers’ powers

There are other factors that do influence how this struggle might evolve in the months and years ahead. One of them is the rapid change in the composition of the workforce. There is also union density currently running at about 12-14% overall. This has to be taken into account in developing programme, priorities, strategy and tactics, and shape how the “the right to strike” can be achieved. Just calling for the “right to strike” in the most militant manner possible will simply not be adequate for the situation we face. And, there is the timing of the national election.

Sally McManus (ACTU Secretary), and other union leaders who have stressed the continuation of the campaign after the next election, are correct to do so. If the Labor Party wins, including with Greens support, a continued campaign will require a clear and determined strategy very different to the collapse of the Your Rights at Work campaign over 2007-9. It will not be adequate to declare, as in 2009, that there is “unfinished business” and then do nothing about it.

The labour movement’s strategy must aim to bring 21st century workers into the experience of struggle, with a new foundation in which they discover directly in their own workplaces and across their industries and regions, the great untapped and democratic potential of their power in combination. The workers themselves, including through their union membership, reveal the power of any appeal to “join their union”.

[1] The “right to strike” issue is put forward in the more comprehensive ACTU Campaign Kit at pp 34-35: here: https://d3n8a8pro7vhmx.cloudfront.net/actuonline/pages/814/attachments/original/1521588484/ctr_campaignkit2018_digital.pdf?1521588484

[2] Andrew Stewart provides a summary of the issues at stake re the ILO standards here: http://communitywebs.org/labourhistory/wp-content/uploads/2016/05/Right-to-strike.pdf

The Annual Wage Review 2017-18: From Marriage Equality to “Economic Inequality”.

By Don Sutherland (March 16th, 2018)

The Annual Wage Review:  update

This week the Annual Wage Review (AWR18) run by the Fair Work Commission (FWC) that sets new minimum rates of pay moved to a new stage. March 13th was deadline day for submissions from “interested parties”. These include employer organizations, governments, and, for workers, the Australian Council of Trade Unions (ACTU).

And, the ACTU launched its 6 week advertising campaign to highlight general and some specific aspects of the “broken rules” of Australia’s Fair Work Act 2009 (FWA09). (Click here.)

Critically, this advertising campaign will lead into days of workers’ action being planned for May.

We also learned that the unregulated salaries of the Chief Executive Officers of Australia’s top 100 corporations pushed on average well above $5 million per year. (page 12.) These characters are not required to apply for a pay increase to the FWC.

Many of them supervise the attacks on the pay and conditions of their own workforce, using the “broken rules” of the FWA09, and their company’s strategy to pay little or no tax, using the “broken rules” of the tax system.

Between now and April 9th the parties can study the submissions of all of the other parties, and any new economic data, and by April 9 present counter submissions. (For more on the AWR process click here.)

Its all very polite and loved so much by those in “the IR club”. The process is designed to exclude the workers who are most affected by it from exerting any real influence. That is, unless they or a good part of them decide to defy the process.

The claims: what we now know

The submissions have now been posted to the FWC web page (click here) that provides the detail of the progress of the Review. There is a good summary of the main claims here. (Also, Caroline Pryor and I on “Workers Radio” . Radio Skid Row, discussed the claims today: click here.)

The ACTU claim is to lift the minimum rate of pay by $50 per week. This is a 7.2% increase for low paid workers. Make no mistake, there is no one else going in to bat for them like the Australian union movement.

This is a claim made for all workers, not just those who are union members. If you are not a member its time to join. If you know someone who is not a member its time to have a serious talk with them. You can help them join directly at this ACTU page: click here.

For the employers, arguably the most influential employer organization, the Australian Industry Group, wants a paltry $12 per week increase on the minimum rate and $14.60 for the lowest award rates. That’s a 1.8% increase, which is less a than the current inflation rate. In other words, a pay cut. No surprise there.

One of the retail employer organizations wants a zero increase. The other concedes a 1.9% increase, as does the Australian Chamber of Commerce and Industry.

The federal government and the ALP did not propose any specific increase but their proposals were quite different.

The Federal government wants the smallest possible increase and argues that really wages should only increase naturally, that is, their genuflection to the “trickle-down effect”.

The ALP, in opposition, with its nose to the federal election breeze as you would expect, endorses a decent increase but one which is “economically responsible”. If the Commission grants $15 per week as “economically responsible” would the ALP accept that? What would their members say? (The Greens and One Nation have not made submissions or proposals. They both should be challenged on that.)

The arguments against the ACTU’s claim

The union activist army must grow in number and also lift their ability to defeat the employers’ propaganda against the ACTU claim.

So far, in the public arena, these are general “arguments”, and say that the claim is 4 times the inflation rate; will destroy jobs; and harm low paid workers.

These will be sharpened and added to in the weeks ahead. Murdoch’s media will be the prime vehicle to spin them.

They will have to be addressed by the union army of activists in their day to communications with workers, including those who are not yet unionised but who can be attracted to the struggle. The ACTU Submission does deal with each of them. And there is also this: click here.

How can low paid workers win? Business as usual or a defiant mobilization? Or leave it to Bill Shorten’s ALP as a new government?

We need a new strategy based on defiance and mobilization. This cannot be a once off, one year exercise. This year’s mobilization, if there is to be one, must pave the way for 2019.

The ACTU itself says that this year’s claim is step 1 towards the creation of a “Living Wage” as the new minimum pay rate. The aim is to establish a minimum rate about 2/3 of the national minimum wage. That would mean about an $80 per week increase this year. Clearly, this year’s strategy must be run as a platform for a more determined and bigger effort next year, no matter who is in government.

From the past 20 years of experience we know that the “obedient” strategy that abides by “the broken rules” is a failure. And, the AWR process in the FWA09 is one of the most broken parts of it. (See sections 134 and 285.) On equal pay the FWC has interpreted the “broken rules” such that important direct arguments on why and how to narrow the notorious gender gap on wages are rejected. (See the ACTU Submission here.)

This strategy is built around polite and strongly researched submissions (still important), orderly advocacy, a few “real” low paid workers as supplicant witnesses (a bit like Dickens’ Oliver Twist asking for more), on line petitions, a dose of social media outrage, and sometimes small scale symbolic protests.

In effect this past strategy concedes to poverty and inequality. On its own IT DOES NOT WORK. It is for dreamers only, those who love court processes, economic “debate”, and custom and practice. Such dreamers could listen to this: “The Basic Wage Dream”.  (It’s an old song with a 21st century meaning. There is a reference to “Nugget” Coombes. He was the governor of the Reserve Bank at the time.)

We all know that enterprise bargaining is falling apart both for workers who have such Agreements and for those who don’t. It is no longer a serious strategic option for any  workers, let alone for the 21st century working class.

The sparkling leadership and campaigning savvy of ACTU Secretary, Sally McManus will not alone win this claim for low paid workers.

McManus needs a much stronger movement along with her than we are currently seeing.

The core spirit of that movement must be the “defiance” that she started talking about just on a year ago in that first memorable interview on “The 7.30 Report”. She has often emphasized it since as the union outlook that has achieved all of the great gains for workers in the past.

It’s time to shift “defiance” from a word with emotional cache to a real mobilization.

Can the Australian union activist “army” deliver real defiance that attracts the low paid and their allies and strike a hard blow against inequality?

Last year the Australian union movement played a highly visible and leading role in the successful campaign for marriage equality. We saw the vibrant energy and campaigning skills of the cohort of union organisers and active delegates and members who have become active in recent years.

It confirmed their very strong grasp of discrimination politics, the meaning and manifold impact of discrimination, and a very clear reminder that the working class includes a significant cohort of gay, lesbian and trans workers, who have vital relationships with “straight” workers as mothers, fathers, daughters, sons, friends and so on.

This campaign strengthened gay workers, educated “straight” workers, neutralized opposition to and prejudice against gay workers, and found collective public actions that all parts of the working class could connect to.

The middle level, newly emerging union leaders – officials, organizers, communications officers, job delegates, active members – showed in that fight against a particular form of discrimination what they are capable of.

Can they reproduce that real potential in a wages campaign? Can the mid level activist “army” get as outraged by the increasing rate of exploitation?

At the moment there is no real sign that they can.

As strong as this part of our movement are on “discrimination politics” they are somewhat weak on “exploitation”, and not showing any sign yet of the same levels of movement wide clarity and energy as last year’s anti discrimination campaign.

The next 6 weeks leading to May is a chance to start changing that.

Because that’s how we build the pressure from below that is needed to win a much better result in this year’s wage claim, much closer to the ACTU’s claim that has ever before been achieved. Luke Hilikari, Secretary of the Victorian Trades Hall Council, gets close to the point here.

Such a mobilization is what is needed for the millions of workers who are dependent on the AWR for their wage increase. These include those who are paid at the minimum rate, those who are underpaid by employers who thieve their wages from them (a business model in 21st century Australian capitalism) and those who are paid a little bit (bit not too much) above the minimum rate, but not enterprise agreement rates that tend to be much higher.

If you wish to use your own initiative to learn more about the formal process, and also see the submissions as they are posted, you can start here: https://www.fwc.gov.au/awards-agreements/minimum-wages-conditions/annual-wage-reviews/annual-wage-review-2017-18 .

https://soundcloud.com/radio-skid-row/don-sutherland-discusses-wage-theft-reports-1-december-2017.

Here On “Workers Radio”, Caroline and I discuss the latest reports of wage theft and hyper exploitation of aboriginal workers in remote Australia and meat workers in northern NSW. WE ALSO START A SERIES OF DISCUSSIONS ABOUT WAGES SUPPRESSION IN AUSTRALIA, INCLUDING NOT JUST WHATS HAPPENING BUT WHY. This discussion will continue over the coming weeks and will connect to the ACTU’s Living Wage Claim to be heard as part of the National Wage Review as it continues in 2018. Please discuss and share. Also send comments, questions and information to workersradio2017@gmail.com .

Australia’s weird new Federal Budget that advocates rapid wages growth: a quick critical note on the commentary

Here, Greg Jericho joins with other mainstream economists in agreeing with the lead analysis of Jim Stanford’s Centre for Future Work, that LNP government’s Budget expectation (requirement) for wages growth is not happening and shows no prospect of happening.

Again the usual high quality info from Greg. But this time, the analysis about why and what might be done is quite shallow, even absent.

Greg’s statistical causation focuses on underemployment. There are other deep factors at play than competing statistical tendencies.  But what establishes and further enables underemployment, and what is its connection to unemployment?

Another deep factor in keeping wages low is the Fair Work Act 2009 systemic, repressive scheme of penalties against workers who seek to exercise their SOLIDARITY power to improve their wages or to improve their job security. The Turnbull government’s only major change to Labor’s own version of this anti worker, anti solidarity wage and conditions fixing regime in the FWA is the harsher penalties against construction workers, including their extension to workers and their unions who do work in association with construction.

This is because Labor’s regime for bargaining and national wage fixing is working perfectly well for employers, not workers, as it was designed to do. This is one of the essential planks of neoliberalism, or Labor’s “neolaborism”, that is not going away … yet.

It beggars belief that this government, and arguably an alternative Labor government, will change the FWA so that workers can help solve their weird wages problem in the macro economy.

The other factor in keeping wages low is the union movement’s failure, so far, to develop a significant strategy that will genuinely restore worker’s right to strike and other forms of collective action, that will include rights to deal with international competition on wages etc., include climate change transition as a bargaining issue, and put worker solidarity back into both minimum legal rights and the development of society.

Mixed up in all of this is the “little matter” of profits. The discussion about profits, or its absence, in Australia is pathetic. Not just the volume of profit, but also what profit is, the exploitation of humans and nature upon which it depends, and profit in relation to total investment, that is the combination of investment in machines, hardware, software development, etc and the workers who bring all of that to life through their labour. We cannot understand the significance of the “wages problem” without grappling with profits and investment. Traditionally, Keynesians are not very good at that. So, we turn instead to our potential as union activists to do it properly?

Where does a diesel mechanic, including field service, a fitter, an electrician, a driver, a yardie, a trade assistant sit in the Australian income leagues tables?

Don Sutherland 27/3/16

I decided to take a close look because early last week the Australian Tax Office (ATO) released to the general public the latest stats on the incomes and income tax paid of Australians. (Click here , and look for Tables 14 and 16)

For example, we learned just how little tax was being paid by some of Australia’s highest income earners.  For example, click here.

Remember, we are talking about “incomes”, not wealth. (We know that some people can report very low incomes but somehow or other be very wealthy.)

The incomes information is in a very big table that divides income levels into 100 “percentiles” – that is, the bottom 1% of income earners, then those between the 1-2%, all the way through, percent by percent, to those earning at the very top, between 99-100%.

And, the ATO tells us how many individuals, both men and women, there are for each percentile, and where particular occupations sit. From this it’s possible to work out reasonably well what the average income is and what the median – the middle point – is in the income league table.

I have been guided by the work of Greg Jericho, a journalist who writes for The Guardian (the Australian on line edition) and the ABC program, The Drum. If you are interested, click here to take a look at Greg’s latest work. Or, follow this link: http://www.theguardian.com/business/grogonomics/2016/mar/24/the-budget-is-coming-so-standby-for-talk-of-ordinary-australians-who-are-these-people

Jericho shows the increase in incomes across all 100 percentiles compared to the previous report.

Among other things, Jericho supports the idea that since the 2007 global economic crisis the rich are paying themselves (earning?) a lot more than they are paying those who they employ. For example, he says:

“But the average income of those in the 90th is 34.9% more than in the 80th; and the average income of the 100th percentile is a jaw dropping 481% larger at $698,574

My go at Greg’s work starts here and then goes on to look at the typical engineering service / metal worker  occupations. It is interesting, also, to see how any individuals there are at each percentile, but that is not the purpose of this commentary.

Avge Tax Income Oz 040416a

So, what about the typical engineering services / metal worker?

Here in this graph is my go at a snapshot for some of the typical occupations in the industry.

EnginServs workers avge taxable income 040416

Remember!  The numbers 30, 40, 50 etc are selected  percentiles only, and each is the average at that percentile for both men and women.

Also, these are the stats for 2013-14, at the beginning of the fall in incomes associated with the fall in mine site production. These numbers also reflect very long working hours for the blue collar jobs. The current numbers (ie early 2016) would tend to be somewhat less, especially for fitters and diesel mechanics.

Anyone can compare their own actual annual income with the graph. I suspect some would be higher than the number for their occupation, and some probably less.

It is worth reflecting on the gender pay gap that prevails in the industry.

Just in case you are interested, you can also see the average taxable income of the senior executives of the type that “manage” engineering service work from their corporate boxes.

We do not know at this time what this means for the members of company Boards and owners. Secret squirrels’ business?

 

 

 

Australia’s working poor: who stands up for them?

Obviously, not the employer organisations:

http://www.workplaceinfo.com.au/payroll/wages-and-salaries/27-a-week-to-avert-working-poor-actu (If the link does not work check the text of this short article below)

Australia’s union movement leads the way.

How to weaken that movement’s effectiveness:

– bring back in a new form anti worker / union member repressive laws – Workchoices Mark 2

– escalate daily propaganda that the union movement a s a whole is corrupt

– give privileged communication rights to white flag union and so-called “labour” leaders – eg Paul Howes, Martin Ferguson

– prevent union achievements from flowing to non organised workers

– promote the myth that only employers have the knowledge and the right to make investment decisions

and so on.

And so we struggle against all of that, right?

If you are fair dinkum against poverty, get on board with this campaign. Anything else will be weasel words.

From Workplace Information, 28/3/14

 The ACTU has called for a $27 a week increase to the minimum wage, calling it “essential if Australia is to avoid creating an underclass of working poor”.

In the next step of its campaign to boost the minimum wage, the union today lodged a submission to the Fair Work Commission’s Annual Wage Review, which included a call for a 71c per hour increase from $16.37 per hour to $17.08 per hour.

ACTU Secretary Dave Oliver said: “A $27 per week increase to the minimum wage will ensure the gap between low paid workers and the rest of the workforce does not widen even further. 

“Australians do not want to live in a country of ‘haves’ and the ‘have-nots’ and the only way for low paid workers to keep up is for the Fair Work Commission to approve this increase.

“That’s why the ACTU is demanding the national minimum wage increase to $649.20 a week for Australia’s lowest paid including cleaners, retail and hospitality staff, childcare workers, farm labourers and factory workers.”

 
Employer groups have been more circumspect, with the Australian Industry Group stating in its submission to the wage review that a careful approach was needed “given the adverse economic impacts which would result from an excessive increase”.
 
The Federal Government is yet to comment on the ACTU’s submission.