Interview: Public Defender
Legal: Craig's Story
Unions: Wrong Way, Go Back
Politics: Queue Jumping
History: Iron Heel
Economics: Waging War
International: Under Pressure
Poetry: Billy Negotiates An AWA
Review: A Pertinent Proposition
The Locker Room
Truth in Advertising
What a Woman!
It's Not Pretty
Not since the days of the Hawke- Keating governments have Australians incomes been the focus of national policy setting.
In this new era of labour market deregulation it has become a sin for our nations leaders to attempt to ensure a fairer distribution of wealth through incomes in Australia.
In times gone by governments would use incomes policy in the same manner as fiscal or monetary policy to encourage a more even distribution of wealth. Such policies formed the basis of Australia's international recognition as an egalitarian society and a land of prosperity and opportunity.
Now most Australian politicians would not even think of incomes policy in such a manner. Most prefer the view that a free market approach to labour and incomes produces the best economic outcomes for our nation. The statistics tell a different story!
Income is the major factor that determines the standard of living of most Australians. It influences a person's access to economic resources and services, and their ability to participate in society.
The Australian Bureau of Statistics (ABS) research household incomes in Australia annually. Recent data trends demonstrate that the gap between rich and poor Australians is growing.
In the period 1995-96 to 2002-03 the share of income of the bottom 20% of Australian households decreased by 0.4%. At the same time the share of income for the top 20% of Australian households increased by 1%.
The ABS also calculates the gini co-efficient as a summary indicator of the degree of inequality of income distribution. Values closer to 0 represent a lesser degree of income inequality, and values closer to 1 represent greater inequality. In the period 1994 / 95 the gini co-efficient was 0.302. This indicator deteriorated to 0.309 in 2002 / 03. A recent ABS study determined "Household income inequality, as measured by the Gini coefficient, increased in Australia by 2.3% during the period between 1994-95 and 2002-03."
Whilst these figures may not seem significant when we highlight the fact that income inequality was actually falling in Australia up to 1996 / 97 the increase in inequality over more recent years becomes more dramatic. The following graph demonstrates this.
These figures graph highlight the rise in income inequality in Australia over recent years. Surely this is not good incomes policy?
The ABS also surveys wage distribution data. In the period May 1998 to May 2004 total average weekly earnings of non managerial adults increased by a mere 1.2% for the bottom 20% of such wage earners. For the top 10% of such wage earners the increase in total average weekly earnings was 13.4%. Again these different statistics indicate a widening of the gap between high and low wage earners in Australia. Surely this is not good incomes policy?
Australia's further social and economic development is at a crossroads. The Howard government seems ideologically driven towards fostering labour productivity by reducing labour costs for businesses. They are developing a system of workplace regulation that will allow wages and incomes to be driven down over time by the operation of market forces. This will trash the high wage- high skill development path that has been a feature of our countries economic development in recent decades. The incomes of Australian workers and the investment that employers make in them will matter less and less as businesses race to compete purely on the cost of inputs in the business.
When the real incomes of workers begin to decline they are forced to work longer hours to compensate for the loss and to be able to pay their mortgages and bills. Working longer hours can mean less time with the family and lead to social dislocation. It also affects a person's ability to contribute to the community in volunteer organisations and the like. How can a father coach the local junior football team if he is forced to work regularly on weekends to maintain the family income?
It's about time our nations leaders, particularly those on the Labor side of the parliament, began to recognise the importance of Australians incomes in our economic and social development. They should not be afraid to highlight the need for regulation to ensure we arrest the decline in real incomes of our nations lower income earners. Our economic and social future depends on it.
Matt Thistlethwaite is Deputy Assistant Secretary- Unions NSW
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