Tuesday, August 04, 2015

The PC's penalties finding: nothing much wrong here

The most important finding of the Productivity Commission's workplace relations inquiry is perhaps the most surprising, given how keen the government was to set it up: "Australia's recent labour market performance does not suggest a dysfunctional system."

Indeed, "strike activity is low, wages are responsive to economic downturns and there are multiple forms of employment arrangements that offer employees and employers flexible options for working".

It's what the OECD found when it visited Australia earlier in the year. Wages respond well to the labour market and the labour market responds well to wages.

Remember how concerned the Coalition was about our unfair dismissal laws back in the early 2000s when Tony Abbott was workplace relations minister? The commission says they are not particularly onerous by international standards. The number of claims lodged is "relatively small". The payouts are "quite low".

The rules are "unlikely to have significant negative impacts on medium to large businesses, especially considering that their purpose is not to minimise costs to employers, but to balance the interests of both employees and employers", it says.

The commission's broader point is that people are not machines. We employ them in accordance with "ethical and community norms".

Without regulation, "employees are likely to have much less bargaining power than employers, with adverse outcomes for their wages and conditions".

While Australia's minimum wage is high by international standards, modest increases in it are "unlikely to measurable affect employment".

The commission reached this conclusion knowing that Labor's shadow assistant treasurer, Andrew Leigh, found otherwise when an academic. But it says his study was conducted when the minimum wage was relatively higher than it is today.

It finds "compelling grounds" for keeping penalty rates. There are "proven adverse health effects" from night work. Public holidays are "by definition, intended to encourage shared community activities".

Not so Sundays. We do one-third of the weekend socialising we did back in the early 1990s, and twice as much shopping. The commission wants to update our workplace relations system. It doesn't want to destroy it.

In The Age and Sydney Morning Herald