WorkChoicesWorld … if you don’t like it you can always leave
Industrial relations - - Posted on May, 28 at 2:19 pm by Ken L
I wrote a post the other day. I pointed out that most of the rhetoric justifying WorkChoices relies on this convenient construct called ‘the employer’, an entity that is assumed to act rationally in its own interests. Once you realise that most workplace relations involve people not employers, and that people are prone to act in their own perceived interests not those of some abstract ‘employer’, much of the justification for WorkChoices looks decidedly shaky.
I did acknowledge one argument that still needed to be dealt with: that even if people acting on behalf of employers act irrationally that doesn’t mean workers will be disadvantaged because they can just quit and get another job. Sooner or later, the argument goes, the organisation will either have to change its employment practices or go out of business. It’s an attractive argument, at least if you’re a WorkChoices fan, so it deserves consideration.
There’s one preliminary point of course: even on its own terms, the argument only holds good during times of full employment. If unemployment began to rise again, some workers would obviously not be able to leave and get another job because there would be no other jobs for them to get. But let’s be generous and assume that the business cycle has somehow been broken and we’re in for an indefinite period of growth, prosperity and jobs for all who want them. Is the argument then a good one? Let’s examine it in more detail.
There are actually two versions of the argument that you might call the fundamentalist free market version and the pragmatic version.
The free market argument
This version maintains that workers should leave jobs if they’re not happy because that’s how markets are meant to function and markets are the One True God. Markets are teh best, Hayek said so, the world would be a much better place if markets ruled, all the problems in the world since Attila the Hun have been caused by lefties trying to interfere in markets … you get the drift.
In other words it’s an ideological position that relies on faith as opposed to logic and evidence. Proponents are like any other fundies, writing as if they have access to Revealed Truth which requires no justification. Some may claim (like Gerard Jackson) to be ‘economists’ even though they are singularly coy about disclosing their professional affiliations or qualifications; others like a few regular commenters at Blogocracy are self-described successful small business owners who’ll back their ‘real world experience’ against all the wankers in universities any day.
The end position of the market fundies is that any worker who doesn’t leave a job where s/he’s not happy is a moron who deserves neither pity nor practical assistance.
The pragmatic argument
This is what might be called the official government line, to the extent that they have one. Most committed Howard supporters have adopted it (fundies of course aren’t committed Howard supporters; the sense of self of any fundies depends on them remaining a self-nominated elite inhabiting an ideological gated community). Pragmatists argue that WorkChoices isn’t a market-based model, it’s still got minimum standards and hey, if you want a fairness test you can have one of those too. Their main aim is to get unions out of the workplace, end collective bargaining and let managers get on with running things. They have a mixed bag of motives, running from pure self-interest (they’re managers) through calculated party-political machinations (hurting unions ultimately hurts the ALP) to irrational trade-union phobia (every time there was a beer strike in the 1970s they got beaten by their dads).
The end position of the pragmatists is that any worker who doesn’t leave a job where s/he’s not happy is not acting sensibly and it’s not worth trying to help people who won’t help themselves.
So what are the flaws that apply to both versions of the argument? You can group them into two rough categories: economic and social. The economic case has been argued more capably than I could by many other writers. One good summary can be downloaded here (caution: the author is a real economist who publishes in peer-reviewed academic journals so don’t bother reading it if you’re a market fundie - it would be like the Answers-in-Genesis people reading Charles Darwin. BTW did you know that dinosaurs were walking around Cambodia only 800 years ago? The internet is so educational once you start reading fundie dogma.)
Anyway I will leave economists like Bruce Kaufman to explain why labour markets don’t really work very well. I’ll concentrate on the social aspects.
Most workers don’t regard their job as an economic transaction
This is where an economic model of the employment relationship falls down. It assumes that employers and workers are rational actors who are exchanging information about the value of a commodity called ‘labour’ in a market (or at least it assumes that’s what they’d do if only they were left to get on with it without the State interfering all the bloody time). In truth, while many managers might think of labour as a commodity, few workers do.
For most workers, work is primarily a social relationship. Sure they get paid for it but that’s only one part of a complex relationship. Our job says a lot about who we are - to family, the wider community and to ourselves. The idea that people make decisions about their jobs based solely on maximising the price they can get for their labour is self-evidently ridiculous to anyone who is capable of observing RealityWorld objectively instead of through an ideological prism.
Workers have an emotional commitment to their jobs
Most people regard their employment as a relationship with a group of people, and a comparatively small group at that. If they work on a Coles checkout, their primary employment relationships are with a handful of co-workers and most importantly, with their immediate supervisor. For most people, the nature of those relationships will play a much bigger role in a decision to stay or leave than their wage. Of course, you could argue that this is silly and they should just focus on their pay but laws like WorkChoices should recognise the way people actually behave, not the way some blinkered ideologues think they should behave.
Moreover, it’s in the community’s interests that workers should make an emotional investment in their jobs, because
Work is a social activity
Most organisations would become dysfunctional if workers became individual economic agents concerned only to maximise their income. The majority of jobs are based on the concept of community and co-operation, and this tendency has been enhanced over the last 20 years with the popularity of team-based work organisation. The result is that most workers have strong social ties to their workplaces. Leaving a fulfilling, enjoyable job just to chase a marginally higher income therefore becomes a demonstrably irrational act once one factors in relevant non-economic considerations.
Nor are emotional ties the only non-economic factors.
A job is an investment
Most people don’t just go to work to swap labour for money. They become assets as well as providers of an input because they acquire knowledge that is valuable to the organisation. The longer they are employed, the more valuable this knowledge is likely to become. The knowledge can be of two kinds: it can be related directly to the organisation’s operations and procedures and it can be ‘tacit’ knowledge, which in another context might be called ‘wisdom’ - knowing what works and what doesn’t on the basis of lived experience. This acquired knowledge is not only valuable to the organisation but also to the worker.
Workers often get rewarded for acquired knowledge directly. They get pay rises or they are promoted to more highly-paid positions. In many instances, these rewards are firm-specific. The acquired knowledge is not transferable to other organisations, meaning that it only has value in the current organisational context. The more this is the case, the more power the employer has to fix wages and conditions unilaterally, because the worker’s labour will not have the same value to any other employer.
Apart from these material considerations, a worker also gets rewarded for accrued knowledge in the form of independence, respect from others, confidence and job satisfaction. All these non-economic assets are at risk if a worker quits for another job.
Third parties
As Kevin Rudd has just demonstrated, changing jobs can have consequences for other people, especially family members. Sometimes this can mean a change in perceived status; other times it might mean having to move away from friends and perhaps family or even transferring overseas. Women are particularly disadvantaged by these considerations owing to the persisting cultural belief that a man’s career is somehow more important than his partner’s. It is often therefore not a practical proposition for a woman to quit and take another job if it would mean moving house, simply because her partner is not prepared to leave his job.
Transaction costs
Changing jobs ranks up there with moving house and the death of a parent as a traumatic experience for many people, regardless of any increased income that might go with the change. Lots of practical problems can arise, ranging from the need to change domestic arrangments to accommodate new working hours through the need to buy a second car to a bigger child care bill. These are the costs that don’t figure in economists’ models but weigh heavily on workers in Reality World.
The non-economic transaction costs of quitting can also be high. Even the act of resigning from an organisation in which some people are close frends who will feel betrayed can be too high an emotional price for some to pay. In some organisations, workers’ whole lives are linked closely with those of other employees through social networks involving the whole family. All these will be disrupted if the worker quits, with consequential effects on partner and kids.
Finally, there are likely to be non-wage elements of the relationship that will influence a worker not to resign - some created deliberately by the organisation as part of its HRM strategy. In all sorts of ways (e.g. mentoring programs) workers might feel that others depend on them and will be let down if they quit. Moreover the worker might have been promised a much-prized promotion in a year or two, or be halfway through a subsidised learning program that s/he is reluctant to abandon. At the mundane level of quantifiable benefits, a voluntary resignation might deprive the worker of substantial accrued entitlements to things like sick leave and long service leave.
For all these reasons (and more), it is simplistic and misleading to pretend that workers will or should simply abandon their jobs any time they feel they are not getting a reasonable wage and go find another job that pays more. People take all sorts of things into consideration when deciding whether to change jobs and it’s entirely rational behaviour on their part to do so. Moreover it’s in the community’s interests that they should behave that way, because organisations would quickly become unmanageable if all employment were to become purely a transaction where money was exchanged for labour (the NRL didn’t introduce salary caps for nothing, you know).
Most people understand this intuitively I suspect … which is why WorkChoices was and remains such a stinking dead cat of a Howard Government initiative, no matter how much they want to rabbit on about pizzas and parking spaces.
Posted in Industrial relations |
May 28th, 2007 at 4:18 pm
Well put, Ken. Of all people, our pollies should understand the more human aspects of employment - they, after all, keep rabbitting on about how much more they could earn in the private sector (though few, like Malcolm Turnbull and Peter Garrett, can actually point to a great deal of success elsewhere). So why do they stay? In Howard’s case, his vision for Australia - that he should be its Prime Minister. There again, I think Howard fits better into your “fundie” category.
May 28th, 2007 at 4:39 pm
It is precisley this kind of reality based analysis that the Paul Kellys of this world are unable to grasp. It is easier to regurgitate vulgar propositions generated by self interested ideologues whose connections to reality would make a maoist blush, than it is to critically analyse propositions for oneself.
The lack of attention to the lived reality of the vast majority of citizens who are wage and salary earners, including those now ‘deemed’ to be ‘independent contractors’ is instructive.
In no other field of human activty, is the actual experience of the subject so discounted as a source of policy or advice. But when it comes to tax policy for example, every bleeding battler with a cool hundred thousand dollars to discount as taxable income, not only has a right to employ an army of expensive advisors and assistants to enable him/her to ensure that as much as possible of their income may be called something else, they can reliably count on an army of employed hacks to tell everybody else that their schemes are the god given right of every citizen in the place. When it comes to stripping rights from people at work however, it is seriously suggested that the collective voice of 1.8 million workers, and their opinons, may be safely ignored as self interested propaganda, while government produced lies (’protected by law’) go straight past those keepers of the public interest, those noble guardians of truth, aka the ‘fourth estate’.
The social disdain and condescension which is showered on those who do the actual work of this society, is becoming positively 18th century in its sense of entitlement.
The lack of attention to the facts of actually existing labour markets, is positively medieval in its wilful disdain for how the world really works.
The politcal consequences will be long term, but they are coming nevertheless.
Authoritarianism at work inevitably enables its growth everywhere, with the concomitant social deference and ‘kiss up kick down’ attitudes, the results will be ugly indeed.
But who cares? So long as some paluka grows rich somewhere, we are all enriched, right?
May 28th, 2007 at 4:54 pm
Good one, can’t praise this post and the previous effort highly enough.
How about combining them for easy access?
May 28th, 2007 at 5:07 pm
Great work Ken. Your analysis shames most of the so-called professional jounalists in this country.
May 28th, 2007 at 6:05 pm
Great post - this needs wider distribution. If only we saw this sort of thing in the newspapers…
What a lot of it boils down to is fungibility - one job is (only very rarely if ever) easily exchangable and equivalent to another. There are too many non-economic factors that we as individuals, families and society (as well as employers) value to simply compare on the basis of salary.
May 28th, 2007 at 6:19 pm
Like the others before me, I have to say yours was a brilliant piece of analysis, Ken.
I love your comparison to ‘fundies’ - the simple child-like belief that the market is a caring creche and if you believe (and say your prayers) yours will be a life of eternal bliss. Tosh!
Talking of Paul Kelly, he was banging on about Labor’s IR policy again today in the Oz. He sez that they should overturn it. Somebody should email that silly farker a clue. Namely, the Government is in a world of hurt BECAUSE of Workchoices. Even those most rusted-on Liberal Party ideologue realise that HMAS Workchoices is dragging them down to the bottom of the polls and will cost them the election. Not Kelly, this prize piece of work thinks that Labor should junk it?
Fundies are a weird mob.
May 28th, 2007 at 6:28 pm
Kelly knows his reign as sage to the great and good is coming to an end, and will definitively end once the government changes. He made his name (such as it is) being spruiker at large for the Hawke/Keating governments, which gave him an entree into places he would never otherwise have entered. Now he has gone from strength to strength, and is nothing more than an overpaid megaphone for the conventional babbitry known as ‘the business community’. He is a total fraud and contributes nothing much more to debate than a regular parading of narrow prejudice and elite gossip, masquerading as considered analysis.
While Latham was a complete prat, at least he got Kelly right.
May 28th, 2007 at 6:34 pm
Oz Sheila, you sure know how to turn a phrase.
Please, God, let Saint Paul Kelly stumble upon this blog…
May 28th, 2007 at 6:34 pm
Beautiful work Ken.
Workers are actual, real live human beings. What a novel concept.
May 28th, 2007 at 7:02 pm
Paul Kelly is just one foul part of the hordes of the ‘living dead’ we’ve watched grow like an insidious, malignant tumour in our society the past decade, & then some…the Light went out in his eyes many years ago. That’s what you get when you sell your soul to the servants of the ole mighty dollar. I imagine the ‘pale one’ no longer has a reflection. Just an uncontrollable, voracious desire to bleed the opposition & critics of his Master, Baron Moidoch…whatever the cost. Another kind of Faith.
Obviously the Unions & Labor are holding the garlic & stakes these days…the Van Helsings of our time. The long night of the Vampyrs & their servants is almost over.
Bring on the Light!
Excellent piece Ken…as ever…& comments all.
BTW…Aussie Sheila, you kicked arse! Someone give her a stake…:)
May 28th, 2007 at 7:37 pm
Thanks Ken.That is what I was saying, now I know what I was talking about.
May 28th, 2007 at 10:49 pm
Of all people, our pollies should understand the more human aspects of employment - they, after all, keep rabbitting on about how much more they could earn in the private sector
How much would Howard have to earn to get free use of a mansion at Canberra, another on Sydney Harbour across from the Opera House, private jets, servants, travel at own recognizance, flunkies, advisors, media barons and presidents inviting him for tea, plus 4 weeks holiday a year…..
I think JWH is getting very much the equivalent of a private sector CEO - he just doesn’t get it in cash.
May 28th, 2007 at 11:07 pm
Sorry that first para was a quote from comment #1
May 29th, 2007 at 12:16 am
Latest Newspoll just out: 60-40 Labor.
Yeehah!
And excellent post, Ken.
A very good night to you all.
May 29th, 2007 at 1:35 am
Cheers everyone, Ken, your thesis should be essential reading in Economics 101.
I looked at your amazingly perceptive and authoritative categories, and thought of my family as an example; our three registered nurse daughters have six degrees, two diplomas, and 2 Certificate 1V’s between them, yet have a Christmas gathering get together and listen in to their perception of the jobs they do. Seldom is money mentioned, whilst their level of responsibility, job description, work load, and necessary compassionate commitment stands in real contrast to Jackie Kelly’s Friday ‘bugger of a job’ comments re: her 10 year membership of parliament, which she is leaving. Again, their earnings pale into insignificance where a backbench pollie’s salary, allowances and pension are concerned, and they won’t be able to retire for years. Kids? Yes, there are kids, and even grandkids are part of their picture too.
One son, an independent contractor, has mortgaged his house, even sold it a couple of years ago, to back a hunch - it came good, really good, but it was touch and go for a time. The other has driven all manner of enormous rigs for over 20 years, criss crossing this great country - indeed, so attached to his current prime mover, he’ll accept most everything his employer demands, SerfChoices and all. Their work/study hours at times have been phenomenal, a good deal unpaid, even a monetary cost to them, yet they keep on keeping on, like so many other ordinary Australians who keep this nation afloat. And their stickability, good humour and sense of the ridiculous is to behold!
As you have demonstrated Ken, why people do what they do to earn a wage, salary or branch out into going it alone is far more complex than simple market forces. Indeed, I think it is because the economic fundamentalist lexicon is decorated with terms such as ‘rational’ and ‘logic’ et. al., it tends to get away far too easily with its Orwellian newspeak faux gravitas.
I personally don’t see a Rudd led Labor government will be that much different fiscally speaking, their lot (and advisors) are as vaccinated with the ‘economic rationalist’ virus as Club Howard, but Rudd does say he has a very real commitment to publically funded universal education, skills training and tertiary study, and sees the need to future proof the nation with a knowledgeable, versatile, seeking citizenry and also cares mightily about the nation’s good health, including their teeth and gums. So I must trust him to at least get something right for, as Aussie Sheila - in her excellent post - says, ‘those who do the actual work of society’
May 29th, 2007 at 4:27 am
Your best post, Ken. Encore!
May 29th, 2007 at 10:26 am
provided Herindoors he doesn’t go down the ‘Academy’ road that Blair has…as revealed in the inspiring doco ‘The Root of All Evil’ it seems Blair & Brown have undermined the growth of secular education by funding more & more schools infiltrated by ‘loopy’ Religious educators that impose on students school texts & projects riddled w/ BS like Noah’s Ark.
And listen to that fool of a NSW shadow Education minister, Stoner, trying to fear-monger & manipulate the electorate:
“Do we allow things to get so bad that we see incidents of the nature of what have been seen in the United States?” Mr Stoner asked.
“As long as the government keeps their head in the sand and tries to spin this line that there’s no problem, ultimately it will (lead to a shooting).”
(SMH, Risks of school shooting in NSW: Stoner
May 28, 2007 - 6:39PM)
Not only is this a cynical & dangerous political maneuver…but i reckon people need to look into the share holdings of these kind of scare mongers & see if they & their families have shares in security companies & private counseling groups. I imagine it’s also a way to try & get schools to take on board Howard’s religious counselors.
Anyone notice how many negative attacks there have been on schools, staff, students of late? Once again children & those associated w/ them are being used as ‘wedge issues’ & political fodder by a bunch of sick politicians & media types. Moidoch & his lackeys feed on this stuff…dividing society into hating, finger-pointing groups…using wealth & privilege to character assassinate opponents…attempting to put FEAR into critics to stymie debate & rational discussion…ensuring their Corporate mates can infiltrate every public sector & plunder, rape & pillage.
The big broom is out & the ‘house cleaning’ has begun…& to heck w/ Party affiliation…conflict of interest, fraud, blackmail & theft are major issues for a ‘fleeced’ & ‘morally dispirited’ public. I’m not one for US & fundy style over-the-top punishments…but i’d like to see some bloody ‘accountability’ & strengthening of ‘ethics’ guidelines & laws when it comes to politics…particularly regarding the relationship between Religion & the State…& Private Companies & the State.
Going by the 4 Corners episode on Private Equity last night (& good for them…better late than never…a problem area we’ve been writing about for some time now) I reckon the population are gonna want a long, hot shower when the extent of the corruption is revealed. On both sides of politics evidently. And throughout the Corporate sector…including the media.
Noone’s perfect…but lets start this new era w/ a semblance of decency & integrity…& vote for polies who put their electorate & the good of the Nation/Country before personal gain & their bank balances.
This election campaign is gonna be one heck of a Hellclone. Who will survive?
May 29th, 2007 at 6:29 pm
Ken, I think many of the people who talk econo-speak in public life understand the ideas you have put forward in this post, it’s just that they seek to use them against us when it comes to negotiating contracts and conditions. They also make a conscious effort to avoid speaking about social/cooperative/individual goal realisation in a positive way that would seek to do something about maximising social goods above those of the individual goods of the owners/managerial elites.
I think it is very important that all of us who seek a humane and sustainable world continue to speak in the terms you outline with regard to the economic and work functions of our society.
May 29th, 2007 at 7:22 pm
Ken, would you mind if I printed a couple of copies of your post to show to some friends of mine?
I thought your post was better than excellent and we { country blokes who ain’t doing it easy), would appreciate exactly why we keep on trying, and I think this would help a lot.
May 29th, 2007 at 11:04 pm
Hell yes LM, go for your life. I’m flattered you’d think it was worth doing. In fact thanks to everyone for the positive feedback.
May 30th, 2007 at 12:29 pm
An excellent post, Ken. Here’s a trackback.
May 30th, 2007 at 3:37 pm
Indeed Mark, Ken’s analytical pieces are essential reading for anyone who can and can’t see the inherent problems w/ Howard’s Workchoice/No Choice legislation. A bit of cosmetic surgery doesn’t hide the beast that lurks below.
Julia Gillard gave an informative & inspiring speech today at the National Press Club…demonstrated why she’s a valuable asset to Australian politics & a breath of fresh air. Her goalkeeping against the Moidoch jerk team showed remarkable skill & was a pleasure to watch. As were her stints as a forward during the delivery of the speech. The use of Menzies’ words to counter the character assassination techniques & addiction to the politics of smear of the Howard Frontbench & its media Enablers brought applause from the audience & a cheer from this lad.
Tho i imagine they’ll do the usual & spin her answers & speech into ‘distortion alley’ located just off the corner of ‘fear-monger’ avenue & ‘Union bashing’ street.
May 30th, 2007 at 4:35 pm
Great article Ken a really clear description of why people want to work.
May 30th, 2007 at 6:58 pm
Love your work Ken; what if your skills are currently engaged by a monopolistic employer; such as the services, police, fire, ambo’s, air traffic controllers, etc. where are you going to go to get that elusive other job? Interstate, overseas etc. there may be Licencing or citizenship issues to consider too which otherwise limits your ability to stick it to the man by leaving; what’s your only choice (if you find yourself in these circumstances), roll over an take it like a good little puppy dog; wait until your next bargaining period and try try try to make your lot better. So far it’s not getting better.
May 31st, 2007 at 1:22 pm
Congratulations on simplifying a complex concept.
You now have another regular reader.
By the way “Work Choices” is not a Howard Government initiative.
It is the child of the “business community” and in particular the H.R Nicholls Society. Howard is just the marionette for this group.
May 31st, 2007 at 2:10 pm
Excellent Ken. Good to see Crikey et al are giving your thoughtful pieces a wider audience.