As economic conditions improve with the longest continuous period of economic growth in Australia since the 1950s, several disquieting factors emerge to upset the trend.
First, we suck imports which puts pressure on the currency and overheats the economy. The corrective action is the raise interest rates which slow things down, but carries the danger of causing the economy and employment to contract. Australia’s balance of trade during this boom remains is worrying, but judicious use of interest rate rises and care to ensure foreign capital continues to flow in can control things.
Secondly, we get a shortage of skilled labour and demands for higher wages. Coupled with this is unions flexing muscle because the boom makes them feel the spectre of unemployment is gone.
This is a more worrying trend. Higher wages, if paid by enterprises that can afford it because they are doing well in the boom, are to be welcomed. Higher standards of living is what economic policy should be about. The trouble arises, however, when wage claims are made across the board or when union muscle is flexed in boom times more in order to keep power than to increase pay.
We are seeing signs of this now in the dispute between the Construction, Mining, Forestry and Engineering Union and BHP. The union is fighting against BHP offering its workers individual contracts. It wants wages and conditions to be determined by collective bargaining between it and the company. The trouble with the union’s approach is that not all BHP employees want the union to represent them. Indeed, BHP says half it employees in its Western Australian mines have accepted individual contracts. Even if this is exaggerated, it is clear that the union does not have unanimous support. The union has engaged in costly strike action, including strikes in the steel division on the other side of the continent.
Moreover, its strikes are embarked upon with the dubious support of members because votes on strike action are taken in the intimidatory environment of an open show of hands, rather than a secret ballot in which true opinion can be expressed.
BHP has exercised its rights to sue the union for the damage caused by strikes at sites to actively involved in the dispute.
The union says it is protecting jobs and its members’ rights to engage in collective bargaining. Buy BHP is not denying the rights of any member of its workforce to be a member of a union and to be represented by that union in wage negotiation. Nor should it. Such action would be a clear breach of national and international rights of freedom of association.
All BHP wants to do is give those employees who wish to the opportunity to enter into individual contracts. The union, however, objects to this.
In short the union is threatening the right not to associate. BHP should be allowed to offer individual contracts and those employees who want to accept them should be able to free from union harassment. If the union is doing such a fantastic job at representing employees presumably none will accept individual contracts.
Instead of threatening strikes and strongarm tactics, the union should improve the standard of representation to members. At present, though, the union fears the loss of any member, no matter how involuntarily coerced into membership, because that is one less subscription and an erosion of the unions power base. In the meantime, the union is depriving employees of the higher wages that come from individual contracts — higher wages that the company can afford to pay because it does not have to support union-driven inefficient work practices.