This festive season has witnessed the return of the once cyclical Christmas strike, with disruptions in the postal and transport sectors. Pre-Christmas strikes
were once so common that, in December 1982, the Australian Postal and Telecommunications Union took out a full-page press advertisement that boasted that there would be “No Postal Strike This Christmas”. Really.
This, apparently, served as a one-off acknowledgment that, in the early 1980s, the economy was in recession and public sector workers were doing better than most of their colleagues in the general workforce.
The fact Australia has one of the strongest economies in the OECD today is primarily due to the economic reforms undertaken over the past quarter-century by the governments led by Labor’s Bob Hawke and Paul Keating and the Coalition’s John Howard. The deregulation of Australia’s once highly regulated industrial
relations system was a central part of this reform process – it began under Keating and continued under Howard and his treasurer,
Kevin Rudd and his Minister for Workplace Relations, Julia Gillard, have been busy over the past two years re-regulating the Australian labour market. This procedure will be finalised in January when the Rudd Government’s Fair Work Act comes into effect.
This will at least take Australia’s industrial relations system back to March 1996, when the Howard government was elected. It is possible the Fair Work legislation will even overturn some of the Keating government’s labour market reforms. Reports of the death of the industrial relations club may have been exaggerated.
The evidence suggests that in contemporary Australia, the well-educated and well-off can look after themselves. Certainly, the global financial crisis has caused some hardship for all socio-economic levels of Australian society.
Yet this downturn – unemployment has increased over the past two years by nearly 50 per cent, from about 4 per cent to nearly 6 per cent – has hit hardest among “blue-collar” workers, especially those employed in manufacturing and construction.
In most economic downturns or recessions, the young are most disadvantaged since they find it difficult to obtain employment. Those with the least educational qualifications are usually the worst off. Their plight is frequently overlooked by journalists, who tend to be young but well-educated.
On Lateline earlier this month, Mark Arbib, the Minister for Employment Participation, took part in the Friday Forum, in which MPs discuss the week in politics.
These days, there is little debate on such ABC-TV programs as The 7.30 Report and Lateline – significantly less than that found on Fox News.
The Friday Forum slot is an exception. However, since the Labor and Coalition MPs who regularly appear on Lateline are good performers, they rarely depart from stating the party line.
Arbib took a soft question from presenter Leigh Sales who suggested that the Australian economy was performing better than when Labor introduced its economic stimulus package.
Arbib responded that “on the ground” the outcome was not so positive. He said he had just returned from Cairns where unemployment was 14 per cent. Then Arbib made the astonishing statement: “In south-west Sydney, at the moment, 47 per cent of teenagers are unemployed.”
The comment should have ignited astonishment. But Sales ignored the point and then suggested to Liberal Party frontbencher Scott Morrison that the Coalition should give Labor credit for its management of the economy. It was as if Arbib had not mentioned the 47 per cent figure.
Before Sales diverted the conversation, Arbib suggested the only way to overcome high teenage unemployment was to “keep stimulating the economy with these infrastructure projects”. But this overlooks the fact most of the stimulus package has already been allocated. Also, the Rudd Government has already spent a significant amount of money in providing incentives for employers to hire apprentices.
Arbib’s concern about the high level of unemployment in Cairns and the large number of unemployed youth in south-west Sydney was genuine. But he failed to consider – and was not asked to consider – whether Labor’s re-regulation of the labour market may have contributed to the problem.
In April, the OECD released a report titled Jobs for Youth: Australia. In it, the OECD specifically warned the Rudd Government that “care should be taken to avoid discouraging bargaining at the workplace level and pricing low-skilled youth out of entry-level jobs”. The Australian Treasury has an input into OECD reports on Australia.
Small business is the main employer of young Australians. The re-regulation of the labour market, in particular the reintroduction of unfair dismissal legislation, has provided a disincentive for small businesses to employ young Australians. This is particularly the case with teenagers who have left school early and are not undertaking further education.
From next month most of Labor’s industrial relations agenda will be in place. The advent of Fair Work Australia will correspond with the seasonal entry of school leavers and young graduates into the workforce. Some will be taken on by the ever-growing public sector.
However, despite good intentions, Labor is making it more difficult for businesses to employ young Australians who live in low socio-economic areas.
Arbib knows the problem but there is no evidence that he understands a possible solution.