Serious question: Is society better off with strikes, or without them?

Australia is now a society without strikes; it is bipartisan policy to make it so a government body decides whether workers can withdraw their labour, so it’s virtually impossible to do it, and has been for more than decade.

The Coalition more or less banned strikes and the Labor Party has declined to un-ban them.

It worked. Working days lost through strikes has fallen by 97 per cent in the past 20 years. They are almost unheard of now.

Over the same period, wage growth collapsed from 4 per cent per annum to 1.5 per cent before the pandemic, and then recovered to 2.5 per cent because of labour shortages – still well below inflation.

Since the mid-1970s, the labour share of national income has declined from 62 to 52 per cent, and the profit share has doubled, despite a setback after the GFC:

It’s a sign of how much society has changed that nobody thinks the absence of strikes and picket lines is odd, or that something is missing.

There was a one-day strike on Monday this week by members of the Commonwealth Public Service Union (CPSU) against Services Australia (that is, the Labor government), but that was a very rare event.

Meanwhile in the United States, more than 450,000 workers have participated in 312 strikes this year, according to Cornell University Labor Action Tracker, and the trend is upwards: In August alone there were 58 strikes involving 202,200 workers.

The most recent big one was auto workers, and others have included Hollywood writers – for 158 days – actors (still going), nurses, factory workers, and Starbucks baristas, all demanding higher pay and better conditions, and in some cases defending against artificial intelligence.

Those on strike often cite the huge increase in CEO salaries as part of their motivation.

So what happened?

It is a lot easier to go on strike in the US than it is in Australia; in fact, lawyers tell me Australia is now the hardest place in the world to go on the grass, helped by the ease with which companies can outsource work to labour hire firms.

The Fair Work Commission (FWC) is central to what happened.

The Conciliation and Arbitration Commission, as it was, acquired its power in 1908, four years after being created, with the Harvester judgement, in which it first set “fair and reasonable” wages, and continued to do so until being effectively removed by enterprise bargaining in 1991.

Then in 1997, the Liberal Party reinstated the power of the commission by putting it in control of disputes, not wages.

Enterprise bargaining backfired on the unions, although it’s possible they always knew it would, which is why they went for control, of superannuation instead.

In a way, super has replaced trade unionism in Australia.

The Howard government tightened the rules about strikes with the Workplace Relations Act of 1996, its first legislative priority after winning the election in March that year.

Howard then over-reached in 2006 with the Workplace Relations Amendment (Work Choices) Act, and got thrown out in 2007 as a result, but when the ALP repealed that law in 2009 and replaced it with the Fair Work Act and created the Fair Work Commission – replacing the Australian Industrial Relations Commission, which replaced the Conciliation and Arbitration Commission – the rules around going on strike remained in place.

They have not been fundamentally changed by the Albanese-Labor government either.

Bureaucratic nightmare

Here’s what the CPSU had to do to have a protected one-day strike this week (“protected” means not being hit by crippling fines):

• They had to show they were an authorised bargaining representative, wait until it was within 30 days of the expiry of the enterprise agreement and then apply to the Fair Work Commission for a protected action ballot.
• The application to hold a ballot had to be specific about exactly what type of action was proposed and how long it would go for. The time frame had to be specific, not indefinite. And it can easily be refused.
• Before granting approval for a ballot, the FWC must be satisfied that the union has genuinely tried to reach agreement and is not trying to bargain for things that are excluded by the Act.
• Having received approval to conduct a ballot, the union must then appoint a ballot agent, to be chosen from a list of seven provided by the FWC. They are the Australian Electoral Commission (AEC) and six private firms: Crowd Faction Pty Ltd, Democratic Outcomes Pty Ltd, Australian Election Company, TrueVote Pty Ltd, uCommunications Pty Ltd and Vero Engagement & Voting Solutions Pty Ltd.
• The AEC only does paper ballots which take too long, so unions generally use one of the private firms which do it digitally.
• The ballot must be secret and there must be a double majority: first, a majority of eligible members must vote, and second, a majority of those voting have to be in favour of the strike.
• Once all that has happened, and if the vote is in favour of a strike, the union must give a minimum of three clear days’ notice of it – that is, if notice is given on Monday, the strike can’t take place until Friday. If it wants to, the FWC can specify that the notice period has to be longer.
• Once the strike has been voted on and notice given, there is a long list of reasons the FWC can suspend or terminate it, to do with the health of the economy and the wellbeing and convenience of citizens.

It is, in short, a bureaucratic nightmare, carefully designed to ensure that strikes don’t happen.

There was a flurry of concern last year when the Albanese government introduced the Secure Jobs, Better Pay Bill , which allowed multi-employer bargaining (it was previously banned) – as long as the FWC gave its approval, of course.

But while the FWC did allow childcare workers to ask 63 employers for a 25 per cent pay rise last month, that negotiation is still going on, politely, no strikes, and there has not been any kind of explosion in pattern bargaining as feared. In fact, no one has applied for multi-employer bargaining at all.

Getting the balance right

The question is whether society is healthier as a result of having no strikes.

We don’t want a wave of strikes like the United States is having at the moment (although we didn’t want their CEO salaries, and got them anyway).

But it seems to me the almost total absence of them is not economically balanced, fair or healthy, for the obvious reason that there can’t be a proper negotiation between capital and labour if only one side is able to withhold.

Employers can always withhold their money, but workers cannot withhold their work unless some government employees say they can.

Alan Kohler writes twice a week for The New Daily. He is finance presenter on ABC News and founder of Eureka Report.