WorkChoices hits productivity and women's wages, says survey

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WorkChoices hits productivity and women's wages, says survey

Wages and productivity falling, working conditions lost and women hit hardest — these are the findings of a survey into the effects of WorkChoices over its first 10 months.

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Wages and productivity falling, working conditions lost and women hit hardest — these are the findings of a survey into the effects of WorkChoices over its first 10 months.

The survey, by Professor David Peetz of Griffiths University Business School, says as a direct result of WorkChoices there has clearly been a substantial loss of conditions of employment, particularly overtime pay and penalty rates, for many workers signing AWAs.

'The minimum wage fixing arrangements established under WorkChoices have led to a real wage decline for most award-reliant (low wage) workers, but the full effect is yet to be seen,' Peetz said.

He said WorkChoices has been associated with a decline in average real wages, at least in the short term, despite the economic boom.

Real wage decline

'It appears to have led to real wage declines in retail and hospitality, probably as a result of the loss of penalty rates in those industries, and in the short term at least a drop in real and relative earnings for women.,' Peetz said. 'Meanwhile profits are at record levels, continuing a trend established under the Workplace Relations Act.'

Peetz said the new Federal industrial relations reforms 'have performed poorly on wages, conditions and productivity, and haven't done any better on employment than the laws they displaced'.

He said findings show the rate at which conditions were removed under the WorkChoices AWAs was substantially higher than under pre-WorkChoices AWAs.

Overtime lost twice as fast

'For example, overtime pay has been lost at double the rate of the past,' Professor Peetz said. 'As a result, during the six months to August 2006, real wages for full-time adults fell by 1.1%. This was a remarkable occurrence during the tightest labour market in 30 years.

'Normally real wages should be booming in such circumstances. While falling petrol and fruit prices should soon bring some stability here, the data raised serious issues about what will happen when the economy slows down.'

Professor Peetz said the retailing and hospitality sectors were areas of special concern.

Reliant on penalty rates

'Workers in both industries are reliant on penalty rates for night and weekend work, and these are susceptible to change under WorkChoices,' he said. 'In the two quarters since WorkChoices took effect, hourly earnings growth rates in these industries have been barely half the rate elsewhere. This probably reflects the loss of penalty rates and other conditions of employment, though the data to verify this is not published.'

Professor Peetz said women were another group who had been affected in the first six months of WorkChoices — especially in the private sector.

'Their real ordinary time earnings fell by 2% in the private sector in the first six months,' he said. 'By contrast, the profit share has never been stronger. In the September quarter 2006 it was at 27.5%, that's 0.5 points above the previous all-time high.'

Employment growth positive

Peetz said employment growth was a positive area, but there was no sign that any gains were a result of the new laws.

'Trend employment growth of 2.4% during the first 10 months was noticeably weaker than the 3.4% growth after the unfair dismissal laws were introduced,' he said. 'Labour productivity has also shown no signs of experiencing the promised boom, with trend productivity falling by 0.7% nationally between the March and September quarters of 2006.

'Productivity has fallen — so far there is no positive impact on productivity due to WorkChoices and there is a chance that the effect will be negative. It's very early days to be telling yet but so far there is no sign of any positive impact.'

Professor Peetz presented his findings at the Association of Industrial Relations Academics of Australia and New Zealand Conference in New Zealand last Friday.

Details

The report on the study.

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