A report on wage suppression commissioned by the Transport Workers’ Union revealed this week that $100bn is going walkies from Australia’s superannuation balances.
According to the Centre for Future Work, a 40-year-old worker affected by wage suppression in the form of wage theft, penalty rate cuts or a cancelled enterprise agreement, is likely to lose between $30,000 to a whopping $270,000 from their superannuation balance by the time they retire.
The researchers’ verdict is that the situation is a “time bomb” underneath the economy. It’s not the only one.
Because when wages are suppressed in these ways, also losing out is Australia’s taxation revenue base. Superannuation is taxed, and lower superannuation savings mean a lower taxation yield. Not to mention, wage suppression also reduces the taxation yield from income tax. And as lower wages mean lower consumption, the taxation raised from purchases – the GST – is lower, too.
You’d think a Coalition that demanded government from the Australian people based on its insistence of a “budget emergency” would be strapping on a panic suit and wading into action waters on wages.
That is, of course, unless you were already acquainted with the Turnbull government, and knew they had other priorities than the things they promised or the things we need. Those priorities are: reinforcing, extending and enhancing the legislative framework that structurally encourages wage stagnation. You know: bashing unions.
What unions do is fight wage suppression. That is the whole gig. Whether it’s on the level of an individual worker subject to wage theft or exploitation or a collective bargaining process for industry-wide improvement to job conditions and pay increases. That’s why study after study has shown that union organising is the difference between economic equality and inequality, that union members not only bring home higher wages but that union membership lifts the wages of non-unionised workers as well. Decades of anti-union practices in Australia include restrictions on the right to strike and capacity to organise so severe we’ve been condemned by the UN’s International Labor Organisation.
But it’s not enough for Turnbull and gang, who, if they have made the correlation between limited union capacity and low wage growth, are indulging a will to ignore it. Just in the last couple of weeks, they’ve tried to deny union members the right to silence. They’re currently trying to deny union members the right to elect their own leadership – something that, if passed in their “ensuring integrity” bill, Australia would suddenly have in common with North Korea, Iran, Turkey and China.
The Australian newspaper ran a headline back in May, claiming the national crisis of low wage growth was “a mystery” to the RBA. Mystery? Is it possible that the shocking transformations undergone in the modern Australian workplace have just somehow escaped the notice of the RBA, and the Australian for that matter? Of greater concern: have they escaped the attention of the public at large?
It was with these questions in mind I approached economist Dr Jim Stanford from the Centre for Future Work, to assist in the preparation of a fun quiz. Test your game buzzers, people! It’s time to play: how much do you really know about today’s Australian workplace?
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What share of the Australian labour force is employed in a permanent, full-time job with regular leave entitlements (you know: holiday pay, sick leave, etc)?
83%
72%
54%
46%
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What share of Australia’s total economic output (aka “GDP”) is paid to workers in wages, salaries, and super contributions?
Almost all
About three-quarters
About two-thirds
Less than half
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Corporate profits in the June quarter of 2017 were up 17% compared to a year earlier. How much did total payments of wages, salaries, and superannuation contributions grow in the same period?
2%
5%
12%
19%
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It is commonly stated that the gender pay gap in Australia is about 16%. This is based on a comparison in full-time jobs. But if we were to include all workers – including part-time and casualised jobs – how much less does the average female employee earn compared to the average male employee?
16%
19%
25%
33%
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Some financial advisers suggest an individual needs a superannuation balance of $1m to finance a secure retirement. What’s the typical (“median”) superannuation balance accrued for Australians aged 60-64?
$60,000
$380,000
$1m
$2.2m
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How much more do union members earn on the job, thanks to their collective bargaining power?
Union members earn less than non-union members
2%
4%
9%
21%
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What proportion of total working time in Australia was lost to industrial disputes (strikes, walkoffs, stoppages) in 2016?
11%
5%
1%
0.005%
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In Australia, which of these strikes are still legal?
A political strike, where workers protest against laws that broadly affect workers’ rights or living standards – eg industrial workers refusing to work on an environmentally destructive task.
A sympathy strike (also known as a “secondary boycott”), where workers in one industry go on strike to support workers in another – like truck drivers refusing to make deliveries of a product from a facility where machinists are on strike
A wildcat strike, where workers walk off the job to protest an immediate situation – like women walking out together from a workplace after an incident of sexual harassment or violence.
An industrial strike against the use of casual or contract labour on a worksite.
“Protected action”, where a union applies to a tribunal for permission to strike only after demonstrating negotiations are at an impasse with an employer. They require the support of at least 50% of the membership in a public vote to do so, and with three days notice to the employer – who can apply to the tribunal to crush the strike at any time.
All of the above.
A, D, E.
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If you participate in an illegal strike, how much can the government choose to fine you?
$100 a day
Up to $550 a day
Up to $1,400 a day
Up to $12,600 per every contravention of an order issued by the Fair Work Commission.
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The OECD has ranked 45 countries in the world according to the strength of their employment protection laws (eg. limitations on dismissal, protection for temporary workers, etc.). Where does Australia rank on that list?
In the top 15
In the middle 15
In the bottom 15
Solutions
1:D - Alarming, isn't it? It’s almost as if rampant subcontracting, sham-contracting and casualisation is destroying the foundations of secure work with stable conditions. Imagine., 2:D - This means that the workforce is not being remunerated for the wealth their work creates - and it’s a record low. In the 1970s, working people took home around 57% of GDP. It’s the private, corporate sector - surprise! - that’s capitalised on wage-earners’ shrunken share - their own slice of GDP has increased by 10 percentage points. , 3:A - And just remember: it’s corporate Australia who are receiving tax cuts from the Turnbull government, too. Sort of like rich people having Christmas dinner twice while working people get one bread roll., 4:D - Yes, it is outrageous. When all forms of work are factored into this equation, women earn a full third less than men do in the Australian workforce. That’s $472 less per week., 5:A - Terrifying, isn't it? When Australians are not being provided the kind of jobs that allow enough superannuation to accrue, retirement looks far from comfortable. , 6:E - As of August 2016, median (mid-point) weekly earnings of union members were $1211, compared to the weekly earnings of non-members at $1000, given that unions can collectively bargain for shared wage outcomes. That being said, remember that higher rates of union density leads to higher wages all round. , 7:D - The threat of strike action always gives working people strength at the bargaining table, and the power to demand their own conditions. No one actually likes going on strike, but Australian labour laws have become so restrictive that the capacity of worker to take action in their own interest has been dangerously compromised., 8:E - Yep. The kind of strikes that created the 8 hour day, reinforced the boycott of the racist Apartheid regime in South Africa, maintained the Green Bans that preserved Sydney’s heritage and the action that forced Frank Sinatra to apologise for his sexist behaviour to female journalists are all illegal now. , 9:D - If the Fair Work Commission issues an order deeming your industrial action as “unprotected”, contravening the order brings massive financial penalties to individuals and fines in the tens of thousands of dollars per “contravention” to the organising union. , 10:C - Australia, the Lucky Country, the home of the “fair go”, is placing an embarrassing 38th out of 45 countries for laws that protect working people. In a global context, the ITUC similarly ranks us as “band 3” nation for workers rights. Alongside, you know, Chad, the Republic of Congo and Poland, but unfortunately not yet reaching the giddy industrial-fairness heights of Albania, Angola and Belize.
Scores
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10 and above.
You are a labour economist, trade union official, you work for the ACTU or are regular reader of my column. The road seems long ahead, comrade, but that “the secret of power is organisation” is as true now as it ever was. And we’ve ever fought our way out of worser spots than this.
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9 and above.
You are a labour economist, trade union official, you work for the ACTU or are regular reader of my column. The road seems long ahead, comrade, but that “the secret of power is organisation” is as true now as it ever was. And we’ve ever fought our way out of worser spots than this.
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8 and above.
It could be denial, fellow traveller - or it could just be luck that industrial misfortunes have not beset you. But be aware, you may be only one shredded enterprise agreement away from the new industrial reality. Ask anyone at CUB. Or Streets. Or Murdoch University.
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7 and above.
It could be denial, fellow traveller - or it could just be luck that industrial misfortunes have not beset you. But be aware, you may be only one shredded enterprise agreement away from the new industrial reality. Ask anyone at CUB. Or Streets. Or Murdoch University.
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6 and above.
It could be denial, fellow traveller - or it could just be luck that industrial misfortunes have not beset you. But be aware, you may be only one shredded enterprise agreement away from the new industrial reality. Ask anyone at CUB. Or Streets. Or Murdoch University.
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5 and above.
It could be denial, fellow traveller - or it could just be luck that industrial misfortunes have not beset you. But be aware, you may be only one shredded enterprise agreement away from the new industrial reality. Ask anyone at CUB. Or Streets. Or Murdoch University.
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4 and above.
You haven’t been keeping up, friend. Things are very different in the Australian industrial badlands since the angry days of the Dalfram Dispute and Pig Iron Bob. I am crossing both sets of fingers in hope you’re not actually the kind of person who says things like “the unions have too much power” because that’s clearly not true, is it?
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3 and above.
You haven’t been keeping up, friend. Things are very different in the Australian industrial badlands since the angry days of the Dalfram Dispute and Pig Iron Bob. I am crossing both sets of fingers in hope you’re not actually the kind of person who says things like “the unions have too much power” because that’s clearly not true, is it?
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2 and above.
You haven’t been keeping up, friend. Things are very different in the Australian industrial badlands since the angry days of the Dalfram Dispute and Pig Iron Bob. I am crossing both sets of fingers in hope you’re not actually the kind of person who says things like “the unions have too much power” because that’s clearly not true, is it?
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1 and above.
You haven’t been keeping up, friend. Things are very different in the Australian industrial badlands since the angry days of the Dalfram Dispute and Pig Iron Bob. I am crossing both sets of fingers in hope you’re not actually the kind of person who says things like “the unions have too much power” because that’s clearly not true, is it?
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0 and above.
You haven’t been keeping up, friend. Things are very different in the Australian industrial badlands since the angry days of the Dalfram Dispute and Pig Iron Bob. I am crossing both sets of fingers in hope you’re not actually the kind of person who says things like “the unions have too much power” because that’s clearly not true, is it?
- Van Badham is a Guardian Australia columnist. She is vice president of MEAA Victoria and her consultancy clients include trade unions.
