Women’s wages and the 2019-20 Annual Wage Review


International Women’s Day (IWD) is now just a week away. A few days later, March 13th, is the deadline day for submissions to the Annual Wage Review (AWR) run by the Fair Work Commission (FWC).

So, in this blog I review what is happening with wage suppression in Australia and focus on what the AWR means for women in paid work.

The current context

First, recently we had another explosion of revelations of wage theft by large companies, and the first serious signs of defence on behalf of those corporations by them, their employer organisations, and their primary employer organisations.

One of the defences means a lot, negatively, for all women: it aims to excuse and justify employers systematically underpaying workers because of Australia’s award system. An award is an industrial agreement that applies to employers and workers in defined industries and occupations. There are 122 awards, and each one sets legal minimum standards on wages and conditions of employment for each industry and / or group of occupations. For example, there is an award for manufacturing workers and employers, another for retail workers and their employers, another for construction workers, and so on.

The employer arguments and the reporting of them are nonsense. Employers do not have to know about every award or the whole system in order to pay correctly for the award, or maybe 2 awards, that cover them and the workers they employ. Learning is not difficult. Years ago, when the system was more complex, workplace delegates (shop stewards) learnt their award as a matter of course, often by reading and discussing its contents with each other and their workmates, or by attending meetings and short courses run by their union or the old Trade Union Training Authority (TUTA). The company personnel officers did the same.

To support these hyper-exploiting employers, the Australian Financial Review (AFR) says the award system should be scrapped. As we shall see below, this is a big new problem for all workers, and especially so for women in paid work.

The AFR is also promoting the defence that the employers’ confected “award complexity” also leads to over payment of workers. There is no sign of real evidence to support that, as there is with wage theft.

Second, recently the Australian Bureau of Statistics (ABS) released its newest data on wages. These showed a 2.2% increase over the past 12 months and thus confirmed that wage stagnation, or wage suppression, is still in force.

The government’s conservative Workplace Gender Equality Agency (WGEA) pointed out this showed just the tiniest reduction in the gender pay gap and increasing complacency among employers towards reducing that gap.

A number of news reporters have provided strong descriptions of what’s happening with wages, although their analysis remains poor. (For example see here, and here.)

Michael Pascoe, reporting and commenting for the online news agency, The New Daily, said:

“… the 2.2 per cent annual pay rise is no rise at all. After tax and inflation, it’s a big fat 0 per cent….

“And it’s actually worse than zero growth for many people. The interaction with our transfer system – family tax benefits, tax rates and such – means many households went backwards. Their real take-home pay shrank….

“What’s more, the present policy mix means that while wages slaves go nowhere or backwards, those who already have substantial assets are enjoying the fruits of asset price inflation brought on by loose monetary policy.”

The Reserve Bank (RBA) governor has given up on his “strategy” against wage suppression – asking employers to say “yes” if their workers ask for a rise – using the bushfires, drought and the corona virus as excuses to do so. So much for the brief and pathetic effort of the Governor to be a workers’ champion. Anyone who fell for that really did come down with the last shower of rain.

Third. Of course, the employers are building new defences to protect wages suppression. The most significant is the new argument that superannuation increases is to blame for keeping wages down. Again, this assault on the superannuation system and wage setting is very serious for working women. Space limits means we must return to this in another post.

Fourth. At the same time, we have the government’s Ensuring Integrity Bill and its review of the Fair Work Act 2009 (FWA09) as it currently stands. This is intended to protect and strengthen wages suppression. The slow drift to an economic recession or downturn continues. Also, the past month has seen the 6 monthly reporting season of company financials and, associated with that, a “stunning” increase in share values on the stock exchange, now under downward pressure allegedly from Covid19.

Meanwhile the Australian Council of Social Services (ACOSS) reports new data that shows an increase in Australians living below the poverty line:

“That included 774,000 children, an increase from the previous study.”

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For all of these reasons, and maybe others, the AWR is a big deal for women in paid work, whether it be full time work or part time work, and as we shall see, has flow in effects – good or bad – to all other workers and their children.

Women and the Annual Wage Review

The Fair Work Act 2009 (FWA09) requires that the FWC conduct an annual review of minimum wages and empowers it to award or not award an increase in those minimum wages. An AWR “panel” does this work, chaired by the President of the FWC. The process is described in relatively plain language at the FWC web site and, among other things, enables interested organisations and individuals to make submissions to it. It denies the rights of low paid workers and their unions to collectively bargain over minimum wages. Bargaining is replaced by “polite submissions” that the FWC considers. The statutory requirements for annual minimum wage setting imposed on the FWC can be found at Part 2-6 section 285 onwards of the FWA09.

All of the decisions from previous years are available at the FWC web site, along with the submissions from organisations and individuals for each year.

The FWC’s decision – increase or not – can be, and usually is, applied to minimum rates in awards, as well as the national minimum wage. Each of the 122 industrial awards sets minimum rates for workers covered depending on the level of the skill and knowledge and sometimes other factors. These are known as the award minimum rates.

Last year, the FWC awarded a 3% increase (close to and sympathetic to the employers’ claims – see below for a bit more), applied to both the NMW and minimum award rates. The NMW became $740 per week or $19.49, an increase of $21.60 per week or 56 cents per hour.

For low paid women, including those on the minimum rate in the award that applies to their work, the following applies:

“[18] The modern awards objective and the minimum wages objective both provide that in a Review we must take into account ‘the principle of equal remuneration for work of equal or comparable value’ (s.134(1)(e) and s.284(1)(d)).

Therefore when its decision is handed down and published the FWC must explain how it has taken women’s wages into account, and by how much.

Women in last year’s decision

Last year the FWC reminded everyone:

“[71] Women are disproportionately represented among the low paid and award reliant, hence, an increase in minimum wages is likely to promote gender pay equity.”

The FWC explains “low paid” thus:

“[199] A threshold of two-thirds of median (adult) full-time ordinary earnings is the benchmark we use to identify who is ‘low paid’ within the meaning of ss 134(1)(a) and 284(1)(c).

“[200] The assessment of the needs of the low paid requires an examination of the extent to which low-paid workers are able to purchase the essentials for a decent standard of living and to engage in community life, assessed in the context of contemporary norms. The risk of poverty is also relevant in addressing the needs of the low paid.”

Median earnings are currently $1380 per week, maybe very slightly higher. Therefore two thirds of that is $920 week and anything there or less than that is the bench mark for being low paid … in the eyes of the FWC.   

But the current National Minimum Wage (NMW) is $740.80 per week..

That means the NMW is $189.20 less than what is accepted as a living wage.

The ACTU’s aim is to win increases that bring the NMW up to the accepted living wage.

What does “award reliant” mean?

The FWC defines an “award reliant” worker as one who is paid at the rate required for the work they do as defined in their relevant award. They exclude a worker who is paid a little bit more than that but who is, in all other respects, reliant for their conditions of work on their award.

So for example, a woman working for wages, may be paid at $26 per hour which is 50 cents above the minimum rate for her type of work. The FWC does not define them as “award reliant” even though, for all practical purposes, they are. Thus, the FWC under-estimates the number of workers, especially women, who are “award reliant”.

The Commission can potentially take any of several different forms, including per cent increases, flat dollar increases or a combination of these.

In recent years the increase has been in the form of uniform percent increases for all.

One factor in the uniform percent approach was this:

“A uniform percentage increase will particularly benefit women workers, because at the higher award classification levels women are substantially more likely than men to be paid the minimum award rate rather a bargained rate.”

The FWC’s decision runs to over 100 pages, and includes more extensive explanation of its thinking about women’s wages, especially equal remuneration and the gender pay gap.

I won’t canvas all of that here, except that it covers the various submissions put to it, especially by the ACTU and the employer organisations, and also its own review of Australian and overseas research. It includes this:

“[390] Most measures of the gender pay gap have fallen over the last couple of years, including the AWOTE, where the gap has reduced from 16.0 per cent in November 2016429 to 14.1 per cent in November 2018.”

Just a couple of weeks ago the government’s own gender equality agency expressed its concern that the slow fall in the gender pay gap has almost come to a halt.

The FWC summed up the situation, as follows:

“[399] Increases in minimum wages, particularly adjustments that might exceed increases evident through bargaining, are likely to have a beneficial impact on gender pay equity. This is so firstly, because of the dispersion of women within award classification structures and the greater propensity for women to be paid award rates and, secondly, because women are disproportionately represented among the low paid.”

We can say with certainty: the bigger the uniform per cent increase, the more likely a bigger decrease in the gender pay gap.

Finally, its worth a quick look at 2 major submissions in last year’s review to compare them with each other and with the FWC’s decision. For women, the most important is the ACTU submission, because it takes the situation of women in waged work most seriously.

The ACTU Submission for 2018-19 (last year)

The ACTU’s aim is to lift the minimum wage to a living wage, and last year it sought a 6% increase applied to the NMW and all modern award minimum wages, as a step towards this aim. This would have been a $43.15 per week increase to the NMW. It’s submission included this:

In 2018 the Fair Work Commission granted an increase to the minimum wage of 3.5% or $24.32 per week, a step in the right direction but one which left many full-time workers struggling.

“The restoration of a living wage – one of the proudest achievements of the early Australian union movement – remains the goal of our ongoing campaign.

“The minimum wage should not leave people in poverty, it should provide a comfortable life for low-paid workers and underpin our labour market.”

For working women and women union activists the ACTU submission is a very important document. One reason for this is its critique of the thinking of the FWC and the employers on a number of issues, but particularly women’s wages, equal remuneration and the gender pay gap.

What is more, the material content in the ACTU Submission is way more comprehensive and gives a clearer picture of the situation than even the FWC decision. For example, it points out:

“Gender pay gap data based on AWOTE (Average Equal Ordinary Time Earnings) are the most commonly used metrics in Australia to measure progress towards gender pay equity, which is when women and men receive equal pay for work of equal or comparable value. However, this measure of the pay gap compares the ordinary time weekly earnings of men and women in full-time jobs only. It hides the gendered access to wage and benefit top-ups on ordinary time weekly earnings reflected in total full-time earnings. In 2018, Figure 6.1 shows that the total gender pay gap in women’s and men’s total full-time average weekly earnings (FTAWE) was 18%. The full-time data also shed little light on the gender pay gap for almost half of Australia’s working women, who work part-time and are not included in this metric. When we include average weekly earnings (AWE) for all workers, both full-time and part-time, the gender pay gap in 2017 rises to 32.4%. This high figure underscores women’s significantly lower earnings relative to men’s in Australia, which have ramifications for lifetime earnings, superannuation earnings and security in retirement.”

Further on equal remuneration, the ACTU says:

“In our submissions to the previous Review, we suggested that the principle of “equal remuneration for work of equal or comparable value”, as defined in the FW Act and applied by the Commission, was ill-suited to examining and addressing gender-based undervaluation in the course of an Annual Wage Review. We also indicated that the apparent rigidity of the equal remuneration principal was a serious flaw in the wage fixation framework.”

It’s also worth comparing the ACTU submission with the employers, for example the Australian Industry Group (AIG).

Australian Industry Group Submission

The AIG submission on wages and equal remuneration is brief and cursory and is, in essence, designed to keep the general FWC decision really low.

They sought an increase of 2%; that is up $14.40 on the NMW and $16.75 for a base level trades person or equivalent. The result was much closer to what they wanted than the ACTU claim.

On equal remuneration, the AIG confined itself to this:

“AIG supports the principle of equal remuneration for work of equal value and the importance of improving gender equality in the workplace. We have been advocates for realistic, practical and targeted measures to eliminate the causes of gender inequality in the workplace.”

In conclusion

The AWR is a big deal for all women but, of course, directly so for women in waged work. It is a big deal for workers who get their pay increases out of enterprise bargaining. The ACTU claim and its supporting arguments are essential elements in the struggle to ensure a better deal for all women because there are flow on effects from full time wages to part time, from those in more secure jobs (falling) to those in precarious work (especially women) and those who depend on the award rate rather than a collective agreement.

Right now, we do not know the ACTU claim but surely we can expect to do so at around IWD or shortly after. We can be sure that ACTU and key union staffers are working on it behind the scenes.

Will there be a fair dinkum campaign and not just polite submissions? What will be the content of such a campaign? Right now, there is no sign of one; no sign even of any systematic union education about the AWR and the award rates, even though relative to enterprise bargaining the AWR is more relevant to more workers than ever before. Is that the business of rank and file workers in our unions, or should they leave it to the wisdom of their elected leaders? That is up to them but, we do know in our history rank and file workers have initiated struggles to lift minimum rates of pay to higher levels.

There is nothing in the genetic make-up of workers in the 2020’s that says they cannot learn to do the same.

Restoring Solidarity Bargaining: is it possible?

Earlier this week, as the ACTU pointed out, the government’s mid year economic update (MYEFO) confirmed that the Morrison government continues to mislead everyone about wages and that wages would remain suppressed for some time into the future. More mainstream commentators are now linking this to other negative trends in the economy that amount to a drift towards economic downturn, maybe recession.

As we drift further into general economic downturn, felt acutely for some years by wage earners, two useful recent bits of information have come to hand. Neither have been widely reported, let alone discussed.

Rate of exploitation

First, from last week’s quarterly national accounts, we see that the rate of exploitation of the Australian workforce continues to rise.

This rate of exploitation is actually somewhat higher because this ABS data includes the salaries of chief and other senior executives who are not exploited. Rather, on behalf of the owners they serve, they supervise and direct the exploitation of the 90%.

Longer term data shows that the current rate of exploitation of workers is about double what it was 50 odd years ago.

The second item comes from research reported by the Centre for Future Work’s Jim Stanford (CFW).

Young workers and award dependence

We see that 67 per cent of “young people” in work (column “Paid by award”) depend for their standard of living on the rate of pay defined in their relevant industrial award. (For employers engaged in wage theft these minimum rates are what they are trying to dodge.) We also know that women workers are far more likely to be on these minimum rates.

Put together, these two separate pieces of information can inform the discussion we must continue to have about our union movement’s ongoing strategy.

Our union movement’s current strategy is a failure, for all but a few

The current union strategy is dominated by compliance with the many “broken rules” of the FWA09 and, within that by enterprise bargaining (EB).

We also know that the parliamentary road to fairness is a dead end. That’s the big outcome and perhaps the big lesson for 21st century unionists from the Federal election result. Those who want us to stick to the parliamentary road must also explain the “logic” of 5 more years passively complying with the broken rules that rob workers of their power and, among other things, are the architecture of wages suppression and rising profits, and the restriction on workers negotiating the purpose of their work.

The enterprise bargaining (EB) addiction

We know that EB is falling apart and is a dead end.  The number of agreements and the number of workers covered by them have been falling for some years now. (See this, and also this.) Union density decline started well before enterprise bargaining but EB has certainly not helped to reverse it.

Our union movement’s fixation on enterprise bargaining can be described as an addiction: it is slowly killing us but every time a threshold EB dispute comes along, we throw our solidarity behind it, while dozens of others receive barely any attention at all, and then celebrate the brave workers if they win (as we should) or complain loudly about the “broken rules” when we lose (as we should).

EB is actually contrary to the core logic, or starting point, of union solidarity: to take wages and conditions out of competition.

What do I mean by that? The very first unionists – discovering their strength in acts of combination – had to learn that workplace only bargaining was the biggest threat to what they would win. A victory in one workplace would be threatened by the competitive advantage to the employers’ competitor that would, in turn, put downward pressure on the victory that had been achieved. The security of one workplace’s wage victory, or improved safety, would depend on it being achieved in the competitor.

Focal points for Solidarity Bargaining

There could be 2, maybe 3, possible focal points that puts Solidarity Bargaining at the forefront of union strategy and pushes EB back to become supplementary action

One of them is industry wide or multi – employer EB, starting from within the current rules. This was discussed a lot during the parliamentary Change the Rules campaign and was one of the prime demands on the Labor Party in the lead up to the election: the restoration of law that enabled industry wide bargaining. (Check here for a recent re-opening of this issue.)

Another is the Annual Wage Review (AWR). These are not mutually exclusive; they can be designed to reinforce each other. For now, let’s take a closer look at the AWR.

AWR: a brief reminder

The FWA09 (current Fair Work Act) requires that each year the FWC (Fair Work Commission), led by its President, conduct a review of minimum rates of pay; not just the statutory national minimum but also the minimum rates for the various classifications in our industrial awards.

2.2 million workers are directly affected by the AWR, plus another unknown number paid marginally above those minimum rates.

The industrial parties – the ACTU on behalf of all workers – and various employer organisations for employers, governments, and some social non-government organisations make submissions about what they say the increase should be.

The rules are stacked against the workers. They remove a bargaining process and replace it with consultations; in effect, for workers and their unions it is toothless because industrial action to support their claim could be defined as not “protected”.

This year the deadline date for the parties’ submissions is March 15th 2020, and the decision must be handed down in late May – early June so that it can be applied from July 1st.

At time of writing we do not know what the ACTU submission will propose. In recent years it has sought to increase the minimum wage to a “living wage”, defined as 60% of the median wage. Last year the ACTU sought an increase of 6% (page 7) to the minimum wage as stage 1 of 2 steps to get the living wage median. They said that if that was granted they would follow up this year (the current Review) with a 5.5% claim.

Last year The FWC awarded 3%, favouring the arguments from the employers in their long explanation.

Alongside of Budget decisions affecting unemployment and associated benefits, the AWR is the single most important annual event that one way or another determines what is happening regarding inequality and the struggle against poverty.

Changing the Rules by doing it?

An alternative, better strategy based on solidarity bargaining must start from within current reality. There can be no rapid shift just because enough of us “call for it”: one day dead end, the next day the light on the hill. It must be developed over time and be rooted in core unionism.

Therefore, over the next few years, and starting as soon as possible, we could restore a focus on an industrial strategy that might start in compliance but then, step by step, some of them big, some of them small, and some in-between, move to defiance. Seeking to win by a big “critical mass” defying the law, not just complying with it.

It cannot be rash or self-indulgent defiance. The strategy must be shared and disciplined, certainly starting small with a decent enough group of unions willing to pursue it, and then accumulating more support and participants as it goes through each stage.

Just as the defensive campaign against the Ensuring Integrity Bill (for more check here) provides a common focus for the whole movement, and requires online and face to face lobbying tasks, an offensive strategy on the Annual Wage Review that escalates solidarity bargaining can start in the same way.

Physical demonstrations can be deployed at selected moments, each having the purpose of informing more members and the broader public of our intent and conducted to attract more people into the actions that will follow, aiming for successively bigger demonstrations.

Every task and action is done to educate all participants that they are together building a 3-5 year strategy.

Think along these lines. What if 600 people – from a good range of unions – rallied in front of the FWC on March 15th (or thereabouts as agreed) to coincide with the presentation of the ACTU’s claim for the AWR now under way?

And then on May Day a couple of months later, on the actual day, there is a follow up with 3000 or 6000 people doing the same, or maybe in front of the headquarters of a major employer organisation?

And, in between, there are smaller but creative physical demonstrations at major events attended by the Treasurer, the Prime Minister or the Workplace Relations Minister.

All the while there is online and face to face lobbying of key politicians, the FWC itself and major employers in support of the ACTU claim and, bringing into play – on the offensive – the 40-45,000 click activists who have been involved in the fight against the EIB.

And, why we oppose the EIB can be a part of the public learning about our demands on the AWR, and associated with that wage theft, built around the theme of fighting inequality.

Union growth can be built into the tasks and actions that drive the strategy in all sorts of ways.

Remember, 67% of young workers are dependent upon the AWR for wage increases because the AWR lifts the rates for each classification in each award (or not). Every union will have members and potential members younger than 35 whose standard of living is defined by the AWR.

Compliant enterprise bargaining is not useful to them, whether they live in poverty, on its border line, or marginally above it. Solidarity bargaining is far more relevant to them.

The economics for this AWR

What follows does not take into account, yet, the impact of the climate change driven bushfires on the economy, although we know already that there is nothing good for tens of thousands already affected.

This AWR is the first since the previous economic downturn in 2008-9 that coincides with both wages suppression and the steady drift into general economic downturn. (For example, read here, here, and here.)

Back then the Rudd Labor government took emergency measures to soften the impact of the global economic crisis in Australia.

However, these did not include changes to Howard’s notorious Workchoices industrial laws, nor better law for annual minimum wage fixing. The so-called “reforms” of the FWA09 did not start until late 2009.

Howard’s fair pay decision maker, Stephen Harper, an academic economist was still in place. and he decided that the pay increase for the year of that downturn, 2009, would be 0%.

Harper is now on the board of the Reserve Bank. The Reserve Bank’s approach to wage suppression is to say that it is a serious problem and then ask employers to give a bit of a wage increase if their employees ask for one. They have never endorsed the ACTU approach to minimum wage increases and probably never will.

Now is a good time

Today, 21st century workers are being exploited at twice the rate that workers of the late 60’s and early seventies.

Enterprise bargaining unionism has contributed to that situation.

It’s time to restore an industrial strategy that re-builds the foundations of power that provide industry and class wide power for workers … it’s called solidarity bargaining.

We defeat the “Ensuring Integrity” Bill: tactical victory or strategic breakthrough?

How should union movement activists define the first defeat of the Ensuring Integrity Bill (EIB)? A major strategic breakthrough or a significant tactical achievement? And why does it matter?

The May Federal election showed the limits of a union strategy focussed almost exclusively on the parliamentary road to fairness.

During the election campaign Morrison and the LNP policy showed no appetite for this Bill. But the employers did and they wasted no time making sure that the new Lib – Nat government would go after unions in a big way, even though the current Fair Work Act 2009 (FWA09) is heavily stacked in their favour, loaded with what we have called its “broken rules”.

Remember, the government’s full Review of the FWA09 is also under way, as required by the employer organisations and their gross lie to the Australian public that the FWA09 is loaded against them, not workers.

Defeating the renewed EIB became an immediate priority for us because it would hit hard at workers’ capacity to use both compliant and defiant unionism And, we had to build that fight very quickly on the rocky terrain of a dispirited and somewhat confused activist base arising from the election result. This necessary defensive engagement was consistent with but could not expect to break through against the FWA09’s anti-worker “rules”. The activist base of our depleted union movement responded strongly in a lobbying campaign and has been defined as the main reason for last Friday’s win.

Our victory means we are marking time, not set back, nor marching forwards towards a “fairer” Fair Work Act, of which the most important feature is the “the right” to strike. What remains at stake is how we go about fighting wage suppression, wage theft and inequality, and associated climate catastrophe. Can we entertain strategic options beyond the “parliamentary road”?

There are 3 good reasons for talking about last Friday’s “win” as a tactical achievement.

There will be a round 2 of this battle pretty quickly

The first and the most obvious is that the Bill will be returned to the Parliament probably next week for reconsideration early next year. The battle will have to be won again, but next time over the torpor of the summer holiday funk that most union activists yearn for. The terrain for us to win again might improve if, in the meantime, the government loses out in the Taylor affair, and on other fronts like its proposed changes on religious discrimination. One self-indulgent, careless act by any union leader in this time will have consequences.

Whatever the thinking behind the ACTU’s courtship of One Nation (ON) and its leader Pauline Hanson, this was a necessary tactical decision; not because of the headline rapprochement with Hanson, but because it paid due respect to the significant working class cohort in the ON electoral base. However, ON’s rejection of the Bill at this Senate vote will not necessarily be repeated. Hanson is rarely consistent or logical. Repeating our effort will depend again on our movement’s effort to mobilise working class ON members and hangers on to tell Hanson and Roberts to vote NO once more. Where Senator Lambie will go next time is also an unknown.

We should never forget that ON politics is based on a racist view of the world that in its essence divides the working class. All the more reason not to build our offensive strategy for the future on tactical necessity to persuade their leaders in the short term.

What type of unionism: compliance and / or defiance?

The second reason for defining this win as a tactical achievement lies in the character of the unionism that we wish to practice both immediately and into the future.

Much of the “mainstream” debate was framed around militant unionism being bad and obedient unionism being acceptable. The EIB is an attack on both. The Bill’s primary spokesperson, Attorney-General Christian Porter, defended the Bill because it would inflict no harm on the Shop Assistants Union that he defined as a “gold standard” union.

To be accurate about it, the ACTU’s messaging was not always about this: highly regarded union workers like nurses, teachers and firefighters, need to to defy the “unprotected action” laws of the current FWA09 to run effective campaigns on healthy employment ratios and the like.

However, this messaging was not always promoted to the broader public. Pushed along by Senator Lambie’s bargaining position, the tendency to “CFMMEU bad, nurses good” was quite prominent.

The modern parliamentary ALP wants compliant unionism. It was the primary architect of the “broken rules” of the FWA09. At the May election it advocated quite narrow reforms if it won government that would reward cooperation with employers and not include an advance on the “right” to strike. There are enough union leaders around who are quite comfortable with that model of compliance.

But do we want an early 2020 tactical campaign to allow ourselves to be defined as “compliant”? What is wrong with defying laws that deny workers the bargaining power to deal effectively with employers on a single employer or industry basis, or to intervene industrially in issues of great social consequence, for example anti-apartheid, anti-war and the march to climate catastrophe?  Compliant unionism has been a dominant feature of our union history but the great historical breakthroughs have been made by defiant, militant unionism that stretch and even break the law. They have NOT been produced through cooperation with employers.

From defensive actions to a new strategic offensive

For 2 to 3 years our union movement has followed a parliamentary road to fairness as its prime strategy. The development and use of restored industrial power was pulled back until a Labor government would “Change the Rules” of Labor’s broken FWA09.

With some exceptions, business as usual has meant obedient grievance handling, compliant enterprise bargaining, and inadequate and obedient annual wage review interventions. These are the elements of the current strategy. But this strategy is not working: it is not generating momentum for union re-growth let alone breakthroughs against wages suppression or defining the role of workers in dealing with climate change, or fixing unions in the public mind as the effective leaders against wage theft.

The enterprise bargaining addiction – despite our deeply felt complaints against it – is particularly harmful. It is a dead end: the number of agreements is declining and their general quality, not just the reduced wage outcomes, is worsening. Nevertheless, we are so addicted that we celebrate the occasional enterprise bargaining victory as a reflection of a noble undertaking. The addicted get their hit and we stagger on blindly searching for the next one. We consent to the logic of competition between employers and in supply chains.

This is the fruit of strategic compliance pushed along by leaders and accepted by members who have not developed thinking and messaging for a new strategy beyond working to get the ALP into government.

We desperately need a new strategy that restores the primacy of industrial campaigning, not least because unions are at their core workplace and industrial organisations. Social intervention depends on that primary rationale, not the other way around. Unions that do not struggle to take wages, conditions and safety out of the competition between employers and their supply chains will wither. The current strategy does not stand up to that core test.

A new strategy means a different line of march that starts on the terrain we are on and that includes limited union consciousness, although strong instincts, among our members, not just those who have not yet joined.

Restoring industrial power to workers will not come from wishing for it, but rather from lots of union education (not just in classes) and less meming, and steadily building industry wide actions that provide experience of it, rather than calling for the “right” to do it. This means building towards common, shared industry-wide defiance, not jumping immediately to it. That means some unions who think they are ready for it now, must be patient and help bring lots more unions into it.

We can see this strategic possibility (instead of the current one) by paying attention to the possibilities that lie in the Annual Wage Review (AWR), conducted by the Fair Work Commission under the requirements of the FWA09, that include the denial of protected industrial action rights. (For more on how this works, please read here.)

The Annual Wage Review (AWR): struggling industrially against wage suppression, instead of complaining about it

The AWR is, potentially, the most important annual event in which workers, led by union workers, can be the prime protagonists against wage suppression and wage theft. (The last decision can be read here.)  It is an opportunity to practice the fight against rising inequality and associated rising rates of exploitation by shifting it onto better terrain.

The AWR outcome impacts directly on low paid workers, those on the minimum wage or on or close to the minimum rates in our industrial awards. However, the outcome also spins off to affect those who are on wage rates that are above those minimums. (Basic union education can explain how and why this is important at all levels of our union movement.)

The current AWR is now underway. Each year the ACTU lodges a claim on behalf of all workers, not just union workers. At time of writing, the ACTU claim for the current review has not been announced. In previous years its claim has aimed to lift the current minimum to what it defines as a “living wage”, that is 60% of the overall median wage. (Keep in mind that the median wage includes the salaries of chief and senior executives thus understating the real median of real wage earners.)

This year’s review will proceed as the global economy, and the Australian economy along with it, drifts into downturn and, possibly, even worse. And this coincides with the fiery burn to climate catastrophe.

The common chorus from across the ruling class – employers and their organisations, their LNP government, the mainstream media and economics commentators, bankers, and the Reserve Bank – will reject a decent increase because it is not affordable. Wage increases should be left absolutely within the power of each employer. The Reserve Bank Governor calls for wage increases but will not support the ACTU claim.

Historically, economic downturns have usually pushed Australian unions into retreat, and more recently, the FWC have directed a zero increase.

But we do not have to comply. We could defy, and do it socially and industrially: building steadily towards an actual demonstration of popular union power that builds in and attracts new union members. We grow by calculated and measured, steadily escalating, industrial actions.

In April and May there were big Change the Rules demonstrations on working week days, 120,000 plus in Melbourne and 6000 (possibly more) in Sydney.

Next year let’s have 6000 or 60,000 workers from all incomes demonstrating and packing out the FWC hearing rooms. That does require a strategy of imagination and defiance. But it has been done before and there is nothing in the genetic makeup of the 21st century Australian worker that says it cannot be done again.

Every union has members, and importantly, thousands of potential members who will be directly affected by the AWR outcome. The outcome will spread to that minority of members who are on enterprise agreements. A movement wide campaign is an opportunity to give living effect to class solidarity, making our singing about it dynamic instead of a ritual.

We do not wait for “the market” to restore wages as if there is some ordained law that demands our obeisance and humiliation. We work away from enterprise bargaining. We fight our way out of the morass with calculated, educated defiance rather than blind compliance.

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