
Issue No 60		30 June 2000

LaborNET	Ask Neale	Tool of the Week

Review

Room to Manoeuvre

By Neale Towart

Full employment with a highly skilled well-paid workforce is a realistic goal for Australia, despite the supposed constraints of globalisation.

Everyone seems to accept high levels of unemployment as unavoidable in the modern economy. The Federal Government claims to have done great things for the unemployed when the rate is gets down to 6.8%. Never mind that this still leaves huge numbers unemployed or as discouraged job seekers, or that ways of reducing the figures involve counting as employed those doing a few hours each month, or cracking down on social welfare recipients as if it is their fault for being unemployed.

Paul Boreham, Geoff Dow and Martin Leet would assert that full employment is an achievable goal.

They have studied the unemployment performances of industrialised countries over the past 25 years and seek to answer questions such as:

 Why has Australia had higher unemployment than other countries over the past 25 years?

 Would solutions to unemployment require higher taxes?

 Has economic rationalism contributed to unemployment?

 What's more important for Australia's future: low unemployment or industry competitiveness?

Their analysis refutes contemporary orthodoxy and the employment strategies adopted by successive Australian governments. The attainment of full employment is a political problem, not one constrained by economic limits. The hegemony of economic liberalism looms large, more so with the consolidation and deepening of this orthodoxy since 1996.

State capacity is important to this frame of reference, with the ability of the state to act and ensure employment goals asserted against those who would argue for the decline in real power of the nation state.

The potential to imagine another way was developed after the 1975 defeat of the ALP, and the Accord was an expression of the way labour sought to extend the confines of economic rationalism/monetarism. The early period of the Hawke government saw real if flawed attempts to wrestle with the unemployment bogey. Having inherited a 10% unemployment rate, this was reasonably successful.

Organised labour also sought to extend its role, the result being Australia Reconstructed, perhaps the most comprehensive political economic strategy ever developed in Australia.

The failure of this approach to have real influence says something about the bureaucratic elites in Canberra, with Treasury fiercely defending its position from alternative sources of advice set up by Hawke, in particular the Economic Planning Advisory Council (EPAC). This body was the true symbol of corporatism with its members drawn from business labour and government. Unions did not succeed in getting the Australia Reconstructed agenda on the table, and EPAC itself seems to have largely acquiesced to the Treasury world view. An opportunity died.

The Business Council of Australia (BCA) seemed to be most successful of the parties involved at getting its agenda on the table in the economic and industrial relations field. The ACTU leadership seems to have fatally gone along with some of the IR agenda, and its notions of strategic unionism and enterprise bargaining were well and truly buried by the BCA approach.

For unions, employees and government, the importance of production was central, but the approach adopted was what the authors call a profitability orientated strategy, rather than a production enhancement strategy.

The defining features of the profitability strategy include:

 High levels of short-term profitability

 Profitability restored or increased by cost reduction in areas such as R & D, investment, training and maintenance

 Wage cuts

 New technology to replace skilled labour

 Employment flexibility created by deregulation of labour market practices, particularly with more casual workers

 High wage full time workers replaced by low wage part-time workers

 Training expenditure focussed on management

 High rewards for managers compared to the rest of the workforce, and managerial control consolidated with contributions from other employees devalued

The production enhancement approach is a complete contrast with:

 Long term focus of productive capacity and market share

 Profitability restored or increased by maintaining and increasing R & D, investment and training

 Concentrates on high wage high skill workforce with high value added production

 Integrates new technologies into a production process which capitalises on an highly skilled workforce

 Limit labour turnover to maximise the return from training and experience

 Seek to guarantee employment security to maintain organisational capacity, institutional memory and experience, even if some underemployment occurs.

 Training and skills development go to all levels of the workforce

 Participation in work decision making is encouraged

The authors argue cogently that labour must have a permanent place in the political process in the capitalist economy, because what labour does is the crucial activity in the economy. The Business Council influence will not disappear, but labour must reassert its role. The Accord and EPAC may be seen as unsuccessful attempts at adopting the corporatist approach in Australia. Boreham, Dow and Leet argue that democratic corporatism occurs when a wide range of decisions are made openly and publicly, by actors in the political process who must act in a public capacity to maintain their legitimacy. Government decisions and policy options do still make a real difference to political economic processes. Globalisation does not remove the role of the nation state and labour as a political actor within the nation state must seek to assert its interests against those who push the neo-liberal globalisation agenda.

(Paul Boreham, Geoff Dow and Martin Leet; Room to Manoeuvre: political aspects of full employment. Melbourne: Melbourne University Press, 1999)

View entire issue - print all of the articles!

Issue 60 contents

Interview: Turning Tides
ACTU President Sharan Burrow reflects on the disappearance of the middle class and what the union movement can do about it

Unions: Fear and Loathing in Wollongong
For four days this week, too much unionism was barely enough. We bring you the highs and lows from behind the scenes and inside the bars of this week�s ACTU Congress.

Politics: The Group Hug
Opposition leader Kim Beazley came, saw and conga-ed. Here's what he said to the ACTU Congress.

History: Unions and Family Trees
Trade union records may not be the first port of call for a beginning family historian, but down the track a little, these records could bring to life an ancestor who previously was just a name printed on the page.

International: Fiji Bans Lifted
Fiji employers are expected to start reinstating all their workers over the next week, now that Australian union bans have been lifted at the request of the local union leadership.

Review: Room to Manoeuvre
Full employment with a highly skilled well-paid workforce is a realistic goal for Australia, despite the supposed constraints of globalisation.

Satire: Satan Subpoenaed To Cricket Inquiry
The King Commission of Inquiry into cricket match-fixing yesterday heard evidence from Satan that he never influenced Hansie Cronje to accept bribes.

» Delegate Rights Up in 48 Hours

» Email Express to Orange Rally

» Nose Stud Leads to Sacking

» Shaw Walks, Costa Considers Future

» Reith's Waterfront Ghost Returns

» Free Trade: Debate We Have to Have

» Superannuation to Hit 15 Per Cent

» ATSIC Chief Calls for Workplace Quotas

» Those Bastards in There

» Strike Marks Resurgence In Community Sector Activism

» Casino Olympic Pay Deal

» NSW School Staff Ban GST Work

» Workers Online Wins ACTU Media Award

» Update: Computer War Hots Up

» STOP PRESS: Pay Equity Decision Handed Down