Fewer Strikes. Record Low Wage Growth.

The Fair Work Commission’s ruling to pre-emptively block industrial action (including restrictions on overtime and a one-day work stoppage) by Sydney-area train workers has brought renewed attention to the legal and administrative barriers which limit collective action by Australian workers.

The Sydney trains experience is a high-profile example of a much larger trend.

Across the national economy, work stoppages have become extremely rare — and the extraordinary discretionary powers of industrial authorities to restrict or prevent industrial action is an important reason why.

“The near-extinction of strike activity in Australia’s economy is a key factor in the deceleration of wage growth to record-low rates,” Dr Stanford said.

“Policy-makers, including RBA Governor Philip Lowe, claim to have been puzzled by the persistent slowdown in wage growth. But the reasons for wage stagnation are pretty obvious: most workers in Australia lack the structural power to demand and win wage increases, and the dramatic decline in industrial disputes is a clear indication of this power imbalance.”

The Australia Institute’s Centre for Future Work analysed Australia’s historical work stoppage data, going back to 1950, including the incidence of work stoppages and the numbers of work days lost as a result — looking at the numbers in both absolute terms and relative to the size of the employed workforce.

Director of the Centre for Future Work, Jim Stanford, found a close statistical relationship between the level of industrial action and the growth of wages over time.

“The near-extinction of strike activity in Australia’s economy is a key factor in the deceleration of wage growth to record-low rates,” Dr Stanford said.

The reasons for wage stagnation are pretty obvious: most workers in Australia lack the structural power to demand and win wage increases.

The main findings of the Centre for Future Work’s report include:

  • The relative frequency of industrial action* declined 97% from the 1970s to the present decade.
    (*measured by days lost in disputes per 1000 workers employed)
  • There were only 106 disputes across Australia during the first nine months of 2017. The low number of stoppages last year may set a record low for the postwar era (final year-end statistics will be released in March.)
  • There is a close statistical relationship between the near-disappearance of strike activity and the deceleration of wage growth, which has also fallen to the lowest rates in the postwar era. Over the postwar period, every decline in the frequency of work stoppages of about 60 lost days per 1000 was associated with a one percentage point deceleration in wage increases.
  • Strike activity in Australia is very low compared to other industrial countries.

Read the Centre for Future Work’s full report: Historical Data on the Decline in Australian Industrial Disputes.

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