Ideas@TheCentre
Pay me my money
For many young people, the old norms of wage arbitration, federal incomes policies, and frequent industrial action are almost completely foreign. Also foreign to them is the highly charged political discourse that accompanies industrial relations issues. Consequently few fully understand or sympathise with the union demands and tactics being played out recently.
Last week, Fair Work Australia approved an agreement allowing contracting company Hull-Moody Finishes to trade overtime, carer’s leave, and long service leave entitlements for increased wages. The agreement gave each of its seven workers an additional $25,000 above the award rate ($40,000) in lieu of benefits.
Many young casual workers would be forgiven for wondering what all the fuss is about, or why such an arrangement warrants industrial arbitration. Surely if both parties consent, then there is no problem.
Furthermore, many workers would be perplexed by ACTU president Ged Kearney’s concerns that workers would take less holidays. That is the whole point. By trading money for benefits, these workers are signalling they value a higher wage over short-term benefits like holidays.
Whatever the rationale, their choice is their prerogative. It’s their money and they ought to have the freedom to use is as they see fit. This freedom is particularly important for workers on lower incomes looking to increase savings and acquire assets. Denying this flexibility only inhibits their ability to work harder and amass wealth.
Juxtaposed against this ruling, the ACTU is seeking amendments to the Fair Work Act to increase access to arbitration. In an increasingly casualised workforce, particularly among Australia’s youth, one-size-fits-all wage arbitration is out of step with the needs of the workforce and only restricts workers’ freedoms.
Alexander Philipatos is a Policy Analyst at The Centre for Independent Studies.
