The Age December 23, 2007
The purpose of the Howard government's WorkChoices legislation was to destroy trade unions in the name of improving labour productivity and reducing unemployment.
WorkChoices was the biggest single factor in the demise of the Coalition government. It was electoral poison because most employees, including those who weren't members of unions and would never think about joining a union, recognised that the legislation could be used to undermine their terms and conditions of employment.
The right-wing putsch against the trade unions failed for much the same reasons as it failed in 1929, when the Bruce government lost the election on the issue of abolishing the Arbitration Court and Stanley Bruce, like John Howard, lost his seat.
It is an inconvenient truth that unionised work forces can contribute to labour productivity by driving up wages faster than non-unionised work forces and this provides a stimulus to innovation, as employers will be motivated to economise on the use of labour by capital substitution. Studies in the US have shown that unionised workers also promote productivity because strong unions foster a culture where workers are less inhibited about pointing out problems as they emerge on the shop floor because they feel the union will protect their employment security.
As US economist and author Robert Kuttner puts it, there are allocative efficiencies to be gained as labour markets become more like spot markets and pay scales are matched with marginal productivity. But there are major mechanisms such as stronger unions, fair trade, wage subsidies and social incomes and education and training that can combine equity with efficiency. The analogy is the old paradox that brakes allow the car to go faster, according to Kuttner.
Employees are less likely to point out management mistakes when they don't enjoy the protection of unions or unfair dismissal rules.
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