Negotiating Power and Unions
November 15th 2007 15:29
Do we in Australia need worker’s unions? Work Choices, the government initiative for one-on-one work contracts, I’m convinced, was an attempt to demolish their power. Yet, as it seems, the public opinion in the current electoral campaign is backing the Labor candidate. So, should we have unions or not?
When I try to answer this question I always go back in time to the industrial revolution of the nineteen century. Though some workers then were doing well, as it appears most were overworked and lived in the most abject poverty. Even children were used to provide labour.
In this scenario no individual worker had any negotiating power whatsoever and pay and conditions were set by their employer to his best advantage. Do you feel surprised with this?
The truth is that business, always that it can, will try to reduce costs, wages and salaries included. And when it negotiates prices for its products it will try to set them as high as possible. There is nothing new here – it’s just the nature of the beast.
What needs to be recognised is that, in order to have a fair wages or product price you need to have some negotiating power. And without unions workers have no negotiating power.
Indeed, it’s when unions were spontaneously created during the industrial revolution aggregating the membership of most workers that they got enough negotiating power to be able to sit down with employers and demand fair pay and conditions. We all know this.
It’s negotiating power, not anything else, and especially not concession or compassion, that bring about fair outcomes in any business dealing, including wages. For this reason alone I am for the unions.
The fear of business is that unions, having circumstantially gotten too much power, then misuse it and abuse the entire system as it happened in the 1970s and 1980s. I find this behaviour regretful and think that governments should do something to conform it.
On the other hand, the claim that unions if given free ride will just put up wages so high that the whole economy would suffer is exaggerated. During the days of Bob Hawke and Paul Keating the various Accords Mark (I-VI) ensured that there was a lid on wages growth and, must not be forgotten, a link with increases in productivity. And productivity did increase significantly while wages were successfully contained.
I do not see any good reason why any government could not sit down with unions and trash out an agreement of similar nature anytime. I think also that Work Choices and all the abuses it enabled has its days counted.
When I try to answer this question I always go back in time to the industrial revolution of the nineteen century. Though some workers then were doing well, as it appears most were overworked and lived in the most abject poverty. Even children were used to provide labour.
In this scenario no individual worker had any negotiating power whatsoever and pay and conditions were set by their employer to his best advantage. Do you feel surprised with this?
The truth is that business, always that it can, will try to reduce costs, wages and salaries included. And when it negotiates prices for its products it will try to set them as high as possible. There is nothing new here – it’s just the nature of the beast.
What needs to be recognised is that, in order to have a fair wages or product price you need to have some negotiating power. And without unions workers have no negotiating power.
Indeed, it’s when unions were spontaneously created during the industrial revolution aggregating the membership of most workers that they got enough negotiating power to be able to sit down with employers and demand fair pay and conditions. We all know this.
It’s negotiating power, not anything else, and especially not concession or compassion, that bring about fair outcomes in any business dealing, including wages. For this reason alone I am for the unions.
The fear of business is that unions, having circumstantially gotten too much power, then misuse it and abuse the entire system as it happened in the 1970s and 1980s. I find this behaviour regretful and think that governments should do something to conform it.
On the other hand, the claim that unions if given free ride will just put up wages so high that the whole economy would suffer is exaggerated. During the days of Bob Hawke and Paul Keating the various Accords Mark (I-VI) ensured that there was a lid on wages growth and, must not be forgotten, a link with increases in productivity. And productivity did increase significantly while wages were successfully contained.
I do not see any good reason why any government could not sit down with unions and trash out an agreement of similar nature anytime. I think also that Work Choices and all the abuses it enabled has its days counted.
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