Want wages to rise? Then support workers’ right to strike

The ongoing debate over the federal government’s proposed industrial relations laws is being frustrated with an “everyone wants to go to heaven, but no one wants to die” type of thinking. Everyone wants wages to go up (or says they do). But an uptick in strike action? That’s a head-shaking no-no-no.

Bad luck. Both economics and history tell us you can’t have one without the other, no matter how hard the balance-of-power-bearing independents in the Senate hope they can square that problematic wages-up/strikes-down circle.

It’s the reverse that’s true: higher wages and more strikes — or, at least, more rights to strike — go hand in hand. A stronger right to strike is critical in making lives better for working Australians, giving them more confidence in their workplace and more money in their pockets.

The industrial legislation is an attempt to flip Australia’s near decade-long real wages slide, with the first tentative steps to reverse 30 years of increasingly onerous legislated restraints on industrial action. 

The new laws will allow workers to campaign and negotiate for sector-wide agreements applying across employers with so-called multi-employer agreements. It’s a power shift — by design — to give workers the ability to organise at scale.

As we’ve known since Keynes ally Joan Robinson pointed out the bleedin’ obvious that the market for labour is inherently unfair. Technically, it’s a monopsony. That is, there are a lot fewer buyers (employers) than there are sellers (all the rest of us). Few buyers? Lots of sellers? That’s power right there.

As conservative governments and employer groups have been lending their arm to the monopsonist strength, labour’s share of the cake has diminished (as it does when real wages fall) while capital’s share has been expanding through multimillion-dollar salaries of senior managers and rising profits.

But along with backing up the right to bargain in sectors comes the right to go on strike. By changing the workplace balance of power, there are hopes of changing the bargaining psychology. It’s a bit like Dashiell Hammett (kinda, sorta) has Sam Spade say in The Maltese Falcon: other forms of persuasion are not much good unless the threat of a strike is behind them.

Conservative governments have been working to pull the sting of that threat since the 1950s — and unions have been pushing back. The Menzies government’s penal provisions in the Conciliation and Arbitration Act were broken by the strikes in response to the jailing of tramways leader Clarrie O’Shea in 1969. 

Cause, effect? The victory over the penal provisions helped inspire the wages breakout of the early 1970s, which pushed labour’s share of income to a high of more than 60%. 

The Fraser government responded with laws outlawing political strikes (like the early 1970s green bans) and sympathy strikes (encouraged, as it happened, by the support given to the printers’ strike at The Sydney Morning Herald). It followed these secondary boycott bans with an attempted wage freeze in the depths of the early 1980s recession.

Under the Hawke government, employers used the courts to resuscitate common law restrictions on strikes. (It was in the action involving Dollar Sweets that Howard’s treasurer and now-Nine chair Peter Costello made his mark.)

The Keating government replied with the first laws that made certain strikes legal in some circumstances as part of its enterprise bargaining package. The Howard government strangled these already limited rights with ever more restraining regulation. Abbott took it further.

In the Media Entertainment and Arts Alliance, I saw firsthand how, in the face of these moves, retaining the ability to bargain by sector was essential to retaining strength in the arts and entertainment industry.

Now, Labor hopes to extend rights again by enabling action across employers. It’s a small step, but enough to have Australia’s employer groups (and their political allies in the Liberal and National parties) huffing and puffing over a back to the ’70s strike-led wages outbreak. (Mark it unlikely.)

They’re lobbying to gut the multi-employer bargaining rights with not one but two ideas specifically tailored to appeal to the independents.

First: win time. Too complex, they say. Too hard to decide. Let’s just split the bill and put off the sectoral bargaining rights to give it more thought (and give employers time to roll out their anti-mining, tax-style campaign).

Second: fence it off. Restrict it to even more powerless low-income sectors or exempt most workers with a radical redefinition of small businesses. In short, create a right that becomes effectively unusable to push up wages.

There’s no guarantee a better right to strike will push up wages. Unions will still need on-the-ground organising and campaigning to turn the right into power. But without better rights, we can guarantee real wages will continue to slide.