ALP and big business push to reduce wages

January 17, 2009

News of a pending pay claim by Alcoa power plant workers in Western Australia has unleashed a flurry of indignant calls for wage restraint from corporate media outlets, bosses and the federal government alike.

The workers are asking for annual pay rises of 5-10% as part of a new enterprise bargaining agreement.

Bleak predictions of rising unemployment reaching 1 million people by the middle of the year and falling profits due to the global economic downturn are being used to demand that unions prioritise job retention over wage campaigns.

"Responsible unions will be giving this issue their full attention in the interests of their members and seeking creative and responsible outcomes in enterprise bargaining to assist businesses to ride out this period", the minister for employment and workplace relations, Julia Gillard, told the Australian on January 8.

According to the Australian, the Construction, Forestry, Mining and Energy Union's mining division WA state secretary, Gary Wood, defended the wage claim on the grounds that the Alcoa power plant workers were underpaid compared to workers doing similar jobs for the state government.

Wood also said that the economic slump would not prevent the union from fighting for better wages and conditions and that Alcoa and its shareholders had done very well out of the mining boom.
The Australian arm of Alcoa alone recorded a net profit of $1.18 billion in 2007, while parent company Alcoa Inc. increased its global net profit by 19%, to $3.5 billion, for the year to December 30, 2007.

Cutting pay

Sydney Morning Herald columnist Mark Davis, however, urged workers to "give your pay packet a shave and help save jobs" in an article on January 2.

Davis called for a national wages policy that would result in upcoming enterprise bargaining agreements curbing wage increases to a maximum of 3% per annum and suggested that the Fair Pay Commission sets a increase to the minimum wage of only $12 for 2009. This compares unfavourably to the $21.66 increase the commission awarded in 2008.

According to the January 12 Australian, the Fair Pay Commissioner, Ian Harper, said that "the protection of jobs" would be his guiding principal when determining any rise in the minimum wage for 2009. Harper was appointed as commissioner under the anti-worker Howard government.

As unions and workers are being called on to forgo wage rises to keep employers afloat and their profit margins up, Australian Industry Group chief executive Heather Ridout made it clear that big business will put its own interests first.

Ridout told the January 5 Australian that it was "misguided to think that the Government can say to employers who are faced with profit downgrades … that they shouldn't be able to make the decisions they need to make for survival".

Instead, Ridout calls on the federal government to use taxpayers' money to fund retraining for retrenched workers, shifting responsibility away from employers.

"I think the Government needs to look creatively at training packages to make sure that people who lose their jobs maintain skills over a few years and increase their skills", she said.

ACTU response

This call to prop up private business with public funds is echoed by Australian Council of Trade Unions (ACTU) president Sharan Burrow in a statement on January 6.

"With targeted government assistance, businesses can use the slowdown to retool and re-skill their employees, saving tens of thousands of jobs and equipping the Australian workforce with the skills to drive growth and competitiveness as the economy picks up", Burrow said.

A spokesperson for the ACTU told Green Left Weekly that under their proposed scheme businesses experiencing a temporary downturn would be able to get government subsidies through the Productivity Places Program to put in place work force development as an alternative to cutting jobs.

The Rudd government's corporate welfare bail-out package already includes a publicly funded $6.2 billion handout to the dying car industry and a donation of $2 billion to car dealers.

In the January 6 ACTU statement, Burrows also argued that in order to avoid job losses, companies could consider reducing production hours and workers should accept retraining positions as an alternative to being stood down. Training wages can mean a pay cut of up to 20%.

The ACTU spokesperson told GLW that under their proposed model unions would seek to bargain for full wages for training days, but that this would likely require some government funding for part of that day's wage.

Fight for every cent

Tim Gooden, the secretary of the Geelong and Region Trades and Labour Council, is critical of the ACTU's plan.

"Bosses and government have always tried to keep wages down. Contrary to what the government would like us to think, we don't live in a 'share and share alike' society", he told GLW.

"When bosses announce record profits they never announce increased wages. Workers have had to fight for every cent we have ever got. When was the last time you heard a boss say, 'Oh, we will reduce our profit to get us through this difficult period'? — never.

"In the same way, you can never trust a boss if they guarantee to not sack people as long as wages are kept down — unions fell for that one under the Hawke government in the '80s. We shouldn't fall for it again.

"At the end of the day we still have to live and if the bosses keep putting up the prices our wages have to go up too. But the Rudd government and big business are using the question of job security as a ruse to scare workers off industrial campaigns in support of a wage claim."

Gooden also told GLW that the union movement needs to raise the call for the nationalisation of companies that fail.

"In cases where industries don't survive and simply sack workers, governments should take over that industry and maintain those workers in employment and keep production going for the good of all. This would be a far better use of public money, rather than just subsidising failing private businesses until [they decide to] close anyway", he said.

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