Pay rises: the new unlevel playing field

[Badshah Mamun]

Pay rises: the new unlevel playing field

By Glenda Kwek

The series of strikes hitting the airline industry may reflect a significant change in the industrial relations landscape - as employers harden their attitudes to pay rises, an employment expert says.

Qantas engineers called off a planned strike for this afternoon across Australia, but other strikes by ground staff over the past few weeks have affected the airline's schedules and thousands of its passengers.

Another strike by customs officers is planned for this Thursday, following the Community and Public Sector Union's rejection of the federal government's offer of a 9 per cent pay rise over three years.

Michael Rafferty, a senior research fellow at the University of Sydney's Workplace Research Centre, said the disputes could signal a growing gap in the expectations of employers and their staff.

"The [Qantas staff] claim is only about 5 per cent and if you allow for some negotiations, that probably brings them to an outcome of 4 to 4.5 per cent - which is the cost of living," said Dr Rafferty.

"And yet that is being quite strenuously resisted by the employers.

"[The] issue is that the employers are saying that we are going to privilege the profit not just at the expense of wage rises but even the cost of living, and that could be quite a significant change in the industrial relations landscape if that's the case."

Widening wage gap

Dr Rafferty said wage agreements were varying across industries, unlike 20 years ago, when they were fairly similar to each other.

He said on the low end, workers in the service industry - partly because of their lack of bargaining power - were receiving pay rises of around 3 per cent, while mining and construction workers were getting more than 5 per cent.

"It feeds into and is a result of the two-speed economy," he said.

Workers' 'sense of injustice'

He said while it was hard to measure the level of dissatisfaction among workers, there was a general sense of injustice about high wages and profits in the corporate sector following the global financial crisis.

"Banks were bailed out, billions of dollars was thrown their way [during the crisis]. The profits of the corporate sector seem to have recovered really well but people have really struggled to get by.

"And the people who have borne the cost of the recovery are now the ones saying, 'Why should we accept less than a cost-of-living rise when we probably suffered that over the last three years in the last round? We are not going to take that any more, especially when CEOs are banking big pay rises that bear no relation to CPI at all."'

Renewed talk on Work Choices

Also significant was the growing political rhetoric around individual workplace agreements from former Liberal Party politicians Peter Reith and Peter Costello, who have called on current federal Opposition Leader Tony Abbott to support workplace reform, Dr Rafferty said.

"They are obviously in touch with people in the business community who are making these claims," he said.

"Two elections ago, workplace [issues were] being pushed off the front-pages by both parties. But now one way or another, workplace issues are going to come back.

"It will be interesting to see if other employers take the lead and whether this growing political campaign also gets legs."

Published: 10 October 2011

Source: http://content.mycareer.com.au/advice-research/salary/wages-inequality.aspx