Eric wrote:
>
>In a recent article Immanuel Wallerstein wrote,
>
>"What a welfare state essentially involved was a social wage,
>where a portion (a growing portion) of the income of
>wage-workers came not directly from employers' wage
>packets but indirectly via government agencies. This system
>partially delinked income from employment . . . "
>
>He goes on to qualify this statement by saying not every worker,
>or every working class fragment, benefitted equally from
>the social wage. And, that the social wage has fallen in recent
>years.
>
this is exactly the way the Incomes and Prices Accord has operated in OZ until
a few years ago. the accord was grossly misnamed as it only sought to control
wages (prices are not able to be directly controlled in OZ). it was trumpetted
as the grand design of consensus - an accord b/tw govt (labour) and the unions
(via cosy deals with the ACTU - the peak body).
it was based on national wage decisions for all workers. the govt. of-course
stitched up a deal with the ACTU and then took it to the Arbitration Commission
for inclusion in awards. Many deals were in the form of increases in the
"social wage" which were deliberately intended to redistribute and realign
factor shares in OZ towards profits. so the govt, did a whole lot of things
like have wage-tax tradeoffs. the workers agreed to wage restraint and the govt
gave them a tax cut, the bosses getting more profits and avoiding paying for
the higher productivity and being able to increase their margins. factor shares
changed by more than 13 per cent in a 10 year period from 1983. gross.
the problem was that the trade-offs impacted unevenly (upper income earners did
much better). the problem also is that when the bubble burst and we went into
recession in the 1990s unemployment rose markedly and the workers after a
decade of labour had seen their real wages cut and their jobs diminishing.
double whammy. the lower tax regimes also locked govt into stupid restrictions
on use of fiscal instruments, biased their policy to lower spending (b/c the
deficit fetishists went wild as usual) and resulted in an excessive reliance on
monetary policy (which is blunt, and contradictory in a nation that wants to
become more competitive on the trade account but have low inflation - the
contradiction is that the low inflation via tight money (or dear money) pushes
the exchange rate up and reduced competitiveness). total wipeout.
now the mighty unions have agreed to have enterprise bargaining and everyone is
going feral about that - with the result that it is even harder for workers to
get adequate pay rises. the cappos have it sussed out here for sure.
anyway, i might get abused again for talking about unions in the real world
- how they actually act, rather than talking about them in the
the rarified air of some left wing social club just before we all launch into
the internationale, suitably pissed i hope.
kind regards
bill
--
#### ## William F. Mitchell
####### #### Head of Economics Department
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#################### New South Wales, Australia
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