>So, for example, higher unemployment now acts as a discipline on
>wages, which used to be provided by a more centralised wage bargaining
>system. It may be less regulated but is equally disciplined. E.g., in
>Australia in the 1950s and 1960s employers were frightened of
>decentralised bargaining because well-positioned workers tended to get
>higher wages than entitled to by the Awards. This problem became known
>in the academic literature as 'wages drift', and employers vocally
>favoured a centralised system that kept them from having to compete on
>the basis of wage costs. Nowadays the attitude is the opposite and
>this is entirely due to the fact that they don't have to worry about
>wage pressures thanks to unemployment. The state is still involved
>here, with macropolicy strategy choking off growth once unsustainable
>wage pressures emerge, but direct regulation has been replaced by a
>more indirect power.
The trade unions had more power back in the 60's and 70's. But would you say that the de-regulation of many key sectors and privatisation of others has played a big part in undermining that power?
Many industries operated as virtual monopolies or duopolies. Some were state-owned and protected from competition. This allowed unions to establish a grip on wages and working conditions.
With de-regulation came collapse of many firms, which obviously destroyed the established wages and working conditions in the whole industry and new entrants to the industry offered drastically lower wages and conditions. Its still going on in some industries.
I suspect that the reform of wages regulation and working conditions is more symptomatic of what is going on than the direct cause. If the regulatory changes had been attempted when the union movement had any power, they would have defeated the attempt.
What do you think?
Bill Bartlett Bracknell Tas