WorkChoices equals wages growth?

by 06 Mar 2007

By Craig Donaldson

With the release of the latest Australian Bureau of Statistics data on average weekly earnings, the usual suspects came to the party claiming that either the sky is falling for workers, or that they’re wading through Elysian Fields of money.

The ACTU said average weekly earnings for full-time employees have failed to keep up with the cost of living, which was proof that Australian working families are suffering under WorkChoices. “These IR laws are a huge free kick for big business but it is at the expense of working families,” bemoaned ACTU secretary Greg Combet.

Meanwhile, the Australian Chamber of Commerce and Industry (ACCI) claimed that actual and real wages growth has continued and WorkChoices was a standout success in its ability to strengthen wages. “Union scare campaign claims that WorkChoices would result in incomes falling in actual or real terms have been proven wrong,” proclaimed Peter Hendy, chief executive of the ACCI.

The reality is that WorkChoices has made it easier in some areas for business and much harder in others when it comes to actually working out some of the legislation. If anything, WorkChoices has highlighted the divide between the skill-haves, and the skill-have-nots.

With skills shortages biting hard in growing sectors, companies are having to pay a premium for workers with select skills. And for the workers with no skills or skills in little demand? You’ll probably find them at the bottom of the pay heap. And WorkChoices has made it easier for business to do this.

New research from GriffithBusinessSchool has found that almost 20,000 employees are losing award coverage every month as a result of WorkChoices, while pay for unskilled female workers is also falling. Furthermore, there is no evidence of significant economic benefits from the new IR laws and, in fact, labour productivity has so far declined.

Regardless of what laws the government of the day puts in place, the law of supply and demand applies to the employment market just as it does to any other.