Trust Me, I'm Fair

For

three decades, John Howard has been on a slow march to end centralized wage-fixing and to break the power of trade unions. In opposition and in government, the Prime Minister has not wavered in his determination to destroy one of the nation's most enduring principles: that wage levels should be set by an independent arbitrator. Talk about a stayer! Australia's industrial relations system has been gradually changing since Labor introduced enterprise bargaining in the early '90s. Now, having taken control of the Senate in July, Howard has a chance to transform it. This should be a good time for a popular government that has won four elections since March 1996. The economy is in its 15th year of growth, material living standards are greatly improved and unemployment is at 5%, a 30-year low.

On Oct. 9, the government announced a reform program called WorkChoices and launched a mass message roll-out that might save the bonuses of the nation's advertising sales folk. "Today, as never before," said Howard, "Australia is a workers' market." The new system is designed to let the market set the price of labor. Pay and conditions will be negotiated between workers and their employers; a new Fair Pay Commission will set minimum wages. A lot of cumbersome and outdated administration will be junked, and unfair-dismissal laws will be made more sensible. The economic argument is that reform will reduce the cost of labor and help the nation become more productive. Jobs will be created and incomes will rise as business and the country prosper. Howard's ideological grace note here is about individualism, freedom and choice. For the culminating effort of a veteran industrial warrior, the proposals appear moderate - indeed, for free-market purists and employer groups they are a disappointment.

Howard calls the measures "major but not extreme." It's classic Howard reform. From little things big things grow, as the vernacular poet sang. If he can swing the legislation without significant alterations, Howard will have started a cultural and economic dynamic that will change Australia forever. Over the coming years, workers' capacity to strike will be limited, the income gap between workers with highly prized skills and those without will expand, the role of unions (already losing their relevance) will decline, and Australians' ideas about the relationship between bosses and workers and about a fair-wage safety net will be revolutionized. In Canberra and beyond, Howard and his ministers have been extolling the proposed new system's fairness, choice and protections - soothing words that seek to hide the darker side of a deregulated labor market and that obscure the true scale of the risks and opportunities of globalization.

But the public appears not to be buying the government's line. In a Newspoll published last week, 50% of respondents said Labor was better than the government at handling industrial relations; only 26% thought the government was better. To be sure, a preemptive ad campaign by unions tapped into concerns about job "casualization," long hours and weekend work and the resulting stress on families, and unscrupulous employers. Peter Jensen, the Anglican Archbishop of Sydney, is one of several church leaders who worry that the proposed reforms could lead to a nation of robots. Further, Australian workers, no matter how well they get on with their employers, don't completely trust them; they may feel vulnerable negotiating one on one with a clever boss or a manager who's the servant of a powerful corporation. Whether or not they belong to a union, workers have traditionally had the protection of award minimum wages that keep pace with national prosperity. So the support for the current system comes from a deep sense of fairness towards the industrially weak, low-paid young people and those who have rotten luck at work.

Perhaps Australia's urban workers are much like their farmer cousins: when the going is good they are all for the market, but when it's tough they expect to be propped up by institutional benevolence. Of course, there's a powerful argument for sticking with an adaptable system that has served Australia so well - and that has evolved a long way since Justice Higgins' 1907 Harvester judgment on the basic needs, and appropriate minimum wage, of an unskilled male laborer. Nor does the case for radical change seem irresistible when Australia's recent history is compared with that of deregulated New Zealand and the U.S. Why would Australians opt for the low wages of the Kiwis and America's social dislocation and inequality when their country has outperformed or matched the other two in job creation, economic growth and productivity? Could it be that Australians detect a touch of zealotry in their P.M.? Howard has delivered on his promise to make Australians comfortable and relaxed. Now he is trying to complete the job he set for himself so long ago. Howard seems to be hoping that the line he is about to draw across the country will inspire voters who feel they can be winners, and shrink the hearts of those who worry about the losers.