Changes at Work - The Impact of Globalisation and Economic Rationalism

This Discussion Starter on Changes at Work and the Impact of Globalisation and Economic Rationalism is part of a broad, inclusive, nation-wide discussion about a better way for Australia than today's market-driven degrading of citizens' rights and the public good.

This discussion process will culminate in a major national conference in Sydney on July 14-15, 2001.

This and other Discussion Starters aim to develop ideas for and interest in the conference, to ensure the most informed and productive level of discussion possible within our resources.

USING THE DISCUSSION STARTER
The project sponsors encourage you to use the Discussion Starter in a group discussion in your locality, community organisation or trade union. If that's not possible, work through the points and questions yourself.

In either case, your feedback on this topic into the discussion process is vital to develop the agenda for the July 2001 conference.

GUIDELINES FOR GROUP DISCUSSION

• Select a facilitator and a note-taker for the discussion
• All participants should introduce themselves and say what they expect to achieve from the group discussion
• Either a guest resource person, or someone in the group, should briefly introduce the first point in the Discussion Starter (5 mins).
• In turn, each participant should comment on the discussion point.
• At the end of discussion on each point, the facilitator should try to briefly summarise the views expressed, and if agreed, the note-taker should record the summary.
• This process should be repeated for each point.
• After all points are discussed, participants should be invited to briefly say if their expectations were met.
• The summary of the discussion should be returned to Now We The People's Sydney office, by email if possible.
• The discussion should be no longer than 90 minutes, and there should be a refreshment break during or at the end of the discussion.

Introduction
In the last two decades in Australia work relations have undergone dramatic change. Economic rationalism and corporate globalisation have steadily eroded much of Australia's economic and social security. As a result of such changes Australian workers, unions and people have suffered.

We are now faced with corporate agendas that dictate to people and governments, an increasingly free reign for the 'market', and the erosion of protection for workers and jobs. The benefits of this change have been anything but evenly distributed, and after two decades of changes most workers are emerging as the 'losers'.

This paper provides a brief overview to the changes that have occurred and the issues involved. As a community we must decide how best to cope with such rapid change. Given we believe there is a better way, we must then ask, how best to go about this?

The information contained in this paper has largely been taken from Australia at Work - Just Managing?, Australian Centre for Industrial Relations Research and Training (ACIRRT), published by Prentice Hall, Sydney in 1999. Page numbers have been provided through out the paper for any readers wishing to obtain further information.

Reference has also been made to a talk given by Dr Peter Brain from the National Institute of Economic and Industry Research, Melbourne, 2000.

1. Changes at Work

During the 1980s and early 1990s Australian workers experienced increasingly less secure forms of employment. Over the period there has been a growing 'irregular workforce', with increases in part-time and casual work, contract and outsourcing work, and temporary employment. Workers also face longer hours, increased stress, stagnant or reduced earnings, an increase in job insecurity, a growth in income inequality and higher levels of unemployment.

• In 1994 one quarter of Australia's workforce were casuals. The major industries relying on this type of workforce were construction, retail and hospitality.
• Between 1983 and 1994 temporary employment increased from 16% to 24%. Today it is at 26%.
• Today outworkers (home based, mainly migrant female workers) can work up to 12-18 hour days, 7 days a week for only one third of the award rate of pay.
• Official unemployment levels have remained at around 6.5% or more since 1991, although if hidden unemployment were to be added, the figure would be closer to 16%.
  (Page 128)

Casual and temporary work is precarious; conditions are worse than for those in full time work, job insecurity is high, workers face psychological pressure and financial insecurity.

Contracting work also makes things difficult for workers, as enforcing any of their rights has to be done through legal action against strong adversaries.

Outworkers suffer extreme exploitation from employers attempting to cut costs in the face of reduced tariff protection from the government. Workers in such industries, especially the textile and clothing industry and the manufacturing industry, face wage cuts and erosion of conditions.

Groups affected by such changes are overwhelmingly women, migrant, blue-collar and young workers.

These changes can generally be attributed to corporations seeing workers as commodities and resources that can be 'cut' or 'reduced' to increase profits. They also come from the erosion of collective forms of working life e.g. unions, and from managers attempting to expand their decision making powers. This is all happening at the same time as technological innovations are resulting in less labour being able to produce more goods and, in some situations, more services.

Questions:

• Have you or people you know become temporary or casual workers? How has this effected their lives?
• Have you or people you know been retrenched or had their job outsourced over the last 10 years? How has this effected their lives? What happened to the company?
• With continuing high unemployment, which means more competition between workers for jobs, how can we best ensure job security and solidarity?
• To which groups are the benefits of increased productivity going?

2. Changes to the Workplace and Workplace Laws
Work intensification and increased job insecurity in Australia has also been facilitated by changes to workplace rules and industrial relations laws. There has been a notable shift away from collective bargaining towards individual, decentralised wage fixing.

In the workplace itself there has been an increase in the scale of 'downsizing', reorganisation of workplace processes, and use of new technologies.

Two major turning points for industrial relations in Australia occurred in 1991 with the full implementation of Enterprise Bargaining, and in 1996 with the introduction of the Workplace Relations Act, and its individual contract provisions.

In 1991 a major step towards the decentralisation of Australia's industrial relations occurred with the transition to institutionalised bargaining at the workplace level - 'Enterprise Bargaining'. The Business Council of Australia and the Federal Labor Government said that to improve the system it was necessary to change the actual workplace culture. At this stage Enterprise Bargaining was still supervised by the Australian Industrial Relations Commission (AIRC), although this was a major reduction in the role of the AIRC in setting wages and conditions for workers. This shift to enterprise bargaining in 1991 meant that only strongly unionised labour could gain real wage increases. The unorganized majority suffered lower real wages, despite safety net increases, because they could not obtain enterprise agreements.

Further decentralisation occurred in 1996 with the Workplace Relations Act of the Howard Government. This Act stripped Awards to core issues and even allowed management to determine unilaterally the content of agreements or to refuse to negotiate. The system of rules and agreements was altered to accommodate negotiations directly between individuals and their employers, cutting out union representatives. Such 'negotiations' were no longer under the jurisdiction of the AIRC but were administered and approved by a separate body, the Office of Employment Advocate (OEA). The Workplace Relations Act further restricted the AIRC by limiting its power to intervene in industrial disputes. The effects of this 'sidelining' were most notable in the Hunter Valley Coal Dispute (1997-2000) and the Waterfront Dispute (1998).

The impact of the Howard Government's workplace law was to deepen the gap between the wages of the unorganised and the organised workers, as well as to make it harder for unions to recruit unorganised workers.

Questions:

• What has been your experience of enterprise bargaining? How has it effected your wages, your working conditions?
• How has your union coped with the enterprise bargaining system?
• How can the gap between wages of the unorganised and the organised, be reduced?
• Have you or people you know been asked by the employer to sign an individual contract? How has this effected them at work?
• Have you or people you know had to rely on the award and safety net increases? What effect has this had on your income and working conditions?

3. Changes to Trade Unions
The changes to industrial relations in Australia have also had a big impact on Trade Unions, which have undergone vast changes in the last two decades due to a combination of external and internal factors.

Externally, unions came under attack from big business, which has led unions into on-going costly court battles. The Howard government continually attacks trade unionism in Australia, and Peter Reith's ban of secondary boycotts - solidarity strikes - has undermined many union strategies. This determined campaign by employers to discourage union membership is the biggest factor in the sharp fall in union membership since 1985.

Along with these external problems unions have also faced difficulty in adjusting to current changes in the labour market. With workplace restructuring, technological changes, new workplace ideologies, changes to the workforce composition, and job cuts, unions have failed to maintain membership levels and struggled to meet workers needs.

• Between 1980-1990 there was a steady fall in union membership. Union density fell from 51% in 1976 to 31% in 1996.
• Between 1990-1996 trade union membership fell by nearly 10% across all industries. Blue-collar industries, with traditionally high levels of union membership, suffered severe decline.
• Between 1990-1995 there was a fall in union presence at the workplace with a 20% increase in the number of workplaces with no union presence at all.
• Trade union membership today is 25% of the workforce and just 20% of the private sector.
  (Page 58)

One of the reasons for this fall in membership is industry restructuring. A decline in blue-collar industries, which have been traditionally highly unionised, has left union numbers dwindling.

Another explanation for this membership drop is that the workforce is now more heavily composed of young people and women, working in part-time and casual jobs. Employers have greatly expanded the use of part-time and casual labour. It has traditionally been harder to unionise such groups of workers.

Questions:

• If you are a union member today, what have been the main benefits of belonging to a union? How can unions be more effective?
• If you are not a union member, what are the main reasons you haven't joined?
• Do unions need to re-think traditional strategies of recruitment to focus on their appeal to women and young workers? How could this be done?
• As a community how can we help promote stronger unions?

Income Distribution in Australia:

• Between 1982-1994 the average Australian took a $67 a week decline in real income. The top 10% of earners gained an increase in real income of about $100/week.
• During the 1980s and early 1990s the number of men earning double the median income increased by1.4%, the figure was 4.8% for women.
• Between 1975-1995 the bottom 10% of low income earners suffered a 9.4% decrease in real earnings
  (Page 66-69)

• Between 1986-1996 in Sydney living standards fell by 8.4% in Fairfield, 9.7% in Bankstown, 10.6% in Holroyd and 2.4% in Botany.
• In the same period living standards rose in the affluent suburbs of Hunters Hill, Mosman, North Sydney and Woollahra by 15% to 20%.
  (Taken from Dr Brain's report)

This increase in income inequality comes from changes to industrial relations and to the labour market under pressure from big business and transnational corporations. There has been a steady decline in full time manufacturing jobs, which have traditionally been highly unionised and well paid, and a corresponding rise in part-time and casual employment in the service sector, which are less unionised and more poorly paid.

Questions:

• What has been the effect of workplace changes on your life and in your community?
• How can unions increase their appeal to casual/part-time workers and to the service sector? Would this help reduce the gap in income inequality?
• What can be done to offset the loss incurred from the hollowing out of the manufacturing industry?
• How could we experience a fairer distribution of income?
• Would strong industry development policy and stronger worker's rights help solve Australia's growing income disparity problem?

5. Links to Corporate Globalisation and Economic Rationalism
Many of the changes that have occurred can be explained by the emergence of economic rationalism and corporate globalisation; market driven solutions to economic and social problems. Economic rationalists believe the solutions to problems in the workplace are: increased individualism, stronger market forces, increased competition, the dismantling of collective bargaining units, and the privatisation of public sector enterprises and agencies. The increased acceptance and application of these market based solutions by corporations and governments all over the world has become known as 'globalisation'. As this corporate form of globalisation continues to grow, all areas of our economic, social and political life become candidates for the rule of the market.

Increased global competition in primary products has meant a long run decline in prices for Australian producers, leading to a relative decline in foreign earnings for the Australian economy from mining and farming.

At the same time increased liberalisation of international trade in manufactured products has seen Australia's domestic manufacturing sector exposed to severe import competition. This has destroyed many thousands of manufacturing jobs in Australia, as global job markets replace national ones.

Global markets in manufactured goods are being expanded through the World Trade Organisation (WTO). As well, the WTO draft General Agreement on Trade in Services aims to create global markets through privatisation of health, education and welfare. Under both the Keating and Howard governments, Australia has allowed multinational companies to decide the shape of Australia's economy, rather than have government develop an Australian industry development program.

Corporate Globalisation and trade liberalisation has enabled extreme exploitation of workers all over the world by multi-national companies and governments. Nike Corporation symbolises this problem with its global market of high priced sports goods being supplied mostly by non-union, sub-contract female labour in Indonesia, paid about A$6.00 per day or A$0.75 per hour. Fifteen years of corporate globalisation has not reduced poverty in third world countries.

Questions:

• What have been the effects of globalisation on both your workplace and home life?
• How have tariff cuts, privatisation and deregulation affected your workplace and your life?
• How can racist responses to the impact of economic rationalism and globalisation be contained?
• How can Australian unions and community organisations promote basic workers' rights in developing countries?

6. A better way - in Australia and internationally?

Corporate Globalisation and Economic Rationalism have led to profound economic and social dislocation. The continuing deregulation and decentralisation of the workforce has left many Australians with precarious employment arrangements and high levels of job insecurity.

A full evaluation of the consequences of trade liberalisation and corporate globalisation is needed. Positive industry policies are also needed to help rebuild the nation. Such policies need to include specific proposals for trade at all levels, incorporate both economic development and fairness, address global trends, and achieve a balance between social, environmental and industrial objectives.

In conjunction with the international community Australia could look at means of using trade to provide real leverage against governments who:

• persistently deny their communities social protections,
• deny access to core labour standards,
• destroy the environment for profit,
• use forced and/or child labour,
• deny working people access to human rights and democratic processes.

• Has the industry in which you work been expanding or contracting? Why?
• Is there a government policy about the development of your industry? What is it? What positive suggestion could you make?
• Could the Australian government selectively ban imported products made by child labour, forced labour or labour coming from areas where core labour standards are not respected?
• What vision do you hold for alternatives to unbridled corporate globalisation and economic rationalist policies?