Interview: The Baby Drought
Industrial: Lies, AWAs and Statistics
Workplace: The Invisible Parents
History: Bruce’s Big Blunder
Politics: All God's Children
Economics: Spun Out
International: Shakey Trials
Legal: Civil Distrubance
Review: Crash Course In Racism
Poetry: You're Fired
The Locker Room
An Act of Faith
Remembering Workers In Cairns
Fair Go For Injured Workers
A Question Of Choice
Galahs Up The Cross
Lies, AWAs and Statistics
Last year you probably heard a lot of the Minister for Employment and Workplace Relations, Kevin Andrews, talking about the much higher wages workers on Australian Workplace Agreements (AWAs) were receiving. He was fond of saying "Workers on AWAs earn on average 29 per cent more than their colleagues on collective agreements. Female workers on AWAs earn 32 per cent more" (emphasis added by the Minister).
The Australian Bureau of Statistics released the latest figures on earnings of workers on AWAs and collective agreements six weeks ago, but I didn't see a press release from the Minister's office at the time. What did they show?
In May 2004, non-managerial workers on registered individual contracts received an average of $23.40 per hour, which was 2 per cent less than workers on registered collective agreements ($23.90 per hour). As 99 per cent of workers on registered individual contracts were on AWAs in 2004 (the state systems of individual contracting having virtually withered away), we can say that AWAs paid about 2 per cent less than registered collective agreements..
For men, the difference between earnings under the two systems was not significant, but women on AWAs had hourly earnings some 11 per cent less than women on registered collective agreements. This was a pretty noteworthy figure, considering the Minister's earlier claim that women earned 32 per cent more on AWAs than on collective agreements.
The gender pay gap was worse on AWAs: whereas women on registered collective agreements received 90 per cent of the hourly pay of men on such agreements, women on AWAs received only 80 per cent of the hourly pay of men on AWAs.
For casual workers, AWAs paid 15 per cent less that registered collective agreements. For permanent part-time workers AWAs paid 25 per cent less. Indeed, amongst permanent part-time employees even "award only" workers (those who received exactly the award rate) were earning an average of 8 per cent more than AWA workers.
For female permanent full-time workers, AWAs paid 7 per cent less than collective agreements. Only for male permanent full-time workers did AWAs have higher average hourly earnings than registered collective agreements (by just 4 per cent), and the number is quite small considering several things that push up the apparent relative pay of AWA workers. For example, AWA workers are disproportionately represented in the high-wage mining industry, while the AWA statistics are slightly bloated by the inclusion in them of a handful of high-paying state-registered individual contracts. In addition, the average earnings of workers on registered collective agreements are dragged down by the fact that a small minority are on "section 170LK" non-union enterprise agreements, which have consistently had lower wage increases than union enterprise agreements. Moreover, the earnings of people covered by collective agreements are held back by the large numbers of free riders - non-members who enjoy the benefits of collective agreements without paying any of the costs of union membership - who depress the bargaining power of workers engaged in collective bargaining.
When the advocates of individual contracting cite higher wages from AWAs than from collective agreements, they are careful to choose the figure that is most favourable to individual contracting - but which is also the least valid comparison of like with like. For example, they will typically use weekly rather than hourly earnings (because AWA employees work 6 per cent more hours, though they have an hourly rate of pay 2 per cent lower, the total weekly earnings of AWA employees are 4 per cent more than workers on registered collective agreements) and include managerial employees (which makes AWA employees appear to receive 12 per cent more per week than workers on registered collective agreements).
This is what Minister Andrews was doing last year, using weekly wages that included high-paid managers in the figures. But even that seems to be something he doesn't do much now. Why? Here's one of his quotes, from June last year (using ABS data from 2002):
"The facts on AWAs speak for themselves. AWAs provide superior wages and conditions for staff compared to federal awards and collective agreements. Average weekly wages for workers covered by AWAs are $1001.10. This compares to $741.30 for workers under collective agreements." (Again, he added the emphasis in bold.)
What do the figures show now? Average weekly wages for workers covered by AWAs in 2004 were $890.80. That's $110 or 11 per cent less than in 2002.
This compares to $787.40 for workers under collective agreements. That's $46 or 6.2 per cent more than in 2002 for workers on collective agreements.
What mainly happened is that the figures that were being cited by Minister Andrews last year excluded many of the low-wage individual contracts were in the Western Australian state jurisdiction in 2002. By 2004, most of those employees were covered by AWAs. (The remainder would mostly have been covered by s170LK non-union enterprise agreements.) The exclusion of Western Australian agreements from the 2002 figures meant that that year's AWA figures exaggerated the incomes of people on individual contracts. Their inclusion at last in the AWA statistics means that the numbers now give a clearer indication of what individual contracts mean for workers' wages.
As Minister Andrews said, the facts on AWAs speak for themselves.
David Peetz is professor of industrial relations at Griffith University and a visiting professor at the University of Bergen, Norway.
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