One of the more bizarre aspects in the lead-up to the Jobs and Skills Summit is the spectacle of business groups buying into the narrative of ‘higher wages’.
It is true that business groups typically qualify their wage rise positions by linking it to productivity. Even so, for business to claim they want higher wages is simply a lie.
Isn’t a core objective of business management to lower costs, including staffing costs? Or am I missing something?
A beneficial scenario for a business is higher productivity per worker, plus lower wages per worker. Assuming stable revenue, this achieves higher profit.
Of course, businesses aren’t in full control. Low wages risk staff retention, especially in periods of low unemployment like we have now.
But higher wages per se is not a business objective.
Pretending as such will tie business lobby groups in knots. Look at what’s happened with the ACTU’s latest push for pattern bargaining.
Union leaders have obviously observed this very strange position where business is on-board with higher wages and they’ve said, ‘Well, okay business, let’s try industry-wide bargaining as this will most certainly give you the higher wages you say you want.’
Business groups should just tell the truth, lower wages and higher profits are nothing to be embarrassed about.
China is a useful case study. No political movement on earth would wish to despise profits more than the Mao-founded Chinese Communist Party, but they are clever enough to realise that capitalism is the only way to grow wealth and power. In doing so, 300 million Chinese citizens have moved out of poverty.
Now I know the argument about being inside the tent and buying into the high wage narrative ingratiates business with Labor unions.
But the unionists you are huddling within that tent are not serious people. They may be adults by age, but their work involves playing childish games.
The prime objective of the unions is to cauterise losses of union membership in the private sector (now 9 per cent ) by getting the government to embed them into a wider role of wage negotiation. The AWU wants imported skilled migrants given default union membership, that’s how desperate they are.
Everyone knows more union dues is the strategy. Don’t buy into it.
If Tony Burke and Anthony Albanese unnecessarily restrict skilled migration, let them bear full responsibility for that. By making them internalise the political cost, they are actually likely to act more adult-like.
Businesses should just tell the truth. There is sufficient economic history and empirical knowledge to take a black and white approach to these issues.
Australia needs skilled immigration, period. There should not be government-mandated pattern bargaining, period.
When Steve Jobs started the process of creating the iPhone, do you think his base motivation was paying employees a ‘living wage’?
When Elon Musk built his Tesla was he thinking that his legacy would be paying wages that exceeded the CPI?
Both entrepreneurs sought to pay lower wages, that’s why they outsourced some operations to China. By taking a hard business approach, they benefited humanity through the creation of innovative products.
If the Albanese government wants workers to have more money, they can cut income tax or write welfare cheques, as they do for pensioners.
And why listen to unions? Look at the damage they have done to public schools and public hospitals.
Each year we wait to hear the new lows plumbed by Australia in the ranking of the PISA international education standards. A recent PISA result showed Australian students had a mathematical literacy three years behind Singapore. Three years! Think about that.
We’ve been told for decades that we just need to overcome this or that barrier: large class sizes, low wages (even though they are actually high internationally), low funding, etc.
We’ve been told kids will learn better via these strange learning innovations based on theories of obscure (Marxist) academics.
Parents don’t want much, they just want their kids to read, write, and be numerate, but that’s seemingly all too confronting for the unions, no doubt such notions are ‘unsafe’.
And in public hospitals we observe constant dysfunction. Despite a massive taxpayer-funded increase in the proportion of our workforce now employed in health, patients are not being unloaded from ambulances due to insufficient or unwilling staff.
The head of the AMA recently used the word ‘biblical’ proportions to describe surgical waiting lists.
Earlier this year, I went to confirm a RAT test at a special Covid clinic set up at Royal North Shore Hospital. There were eight nurses in the clinic, I was the only customer.
Because it was so quiet, I thought I’d get a booster shot while there. But I was told they didn’t offer that service. Remember, this was a dedicated Covid clinic.
Can you ever imagine Dominos Pizza forcing their customers to order on a different website if the customer wanted to add a slab of garlic bread to their pizza delivery?
Unions just screw stuff up. So businesses shouldn’t be bargaining with them, giving them credibility. If that means standing outside the tent, then that’s probably the best place to be.
Nick Hossack is a public policy consultant. He is former policy director at the Australian Bankers’ Association and former adviser to Prime Minister John Howard.
