Helen Masterman-Smith
The Australian Bureau of Statistics' latest report on pay setting methods reveals the complex consequences of individual agreements for the work force. It indicates many sections of the work force lose out under individual contracts, not just marginalised workers.
At first glance the 2004 Employee Earnings and Hours Survey suggests workers on individual agreements receive wages 9% above those employed on registered collective agreements. Yet, the devil is always in the detail. The spoils of individual agreements — Australian Workplace Agreements (AWAs) — are unevenly divided according to what kinds of work people do, where they work and who they are.
On average, full-time adult non-managerial employees on individual agreements earn $24.70 a week less than workers covered by collective agreements. The lower pay rate is not compensated for by better conditions. Permanent full-time workers on AWAs work the longest average hours.
Permanent part-time workers on individual agreements receive the lowest hourly rate. At $15.60 an hour, they are paid 20% below the average hourly rate, a rate lower than those on awards. Under registered individual agreements, the supposed financial benefits of "going casual" are a myth. Casual employees on registered individual agreements earn 15% less than casual workers employed under registered collective agreements.
Being female does not augur well either. Women on registered individual agreements earn $41.90 less than those covered by collective agreements. As importantly, the gap between male and female earnings is much wider under individual agreements. Women earn 72% of the average total earnings of men under collective agreements, but only 60% of male earnings under individual contracts. This represents a major challenge to the equal pay campaign. The report did not include data on the cultural or age impacts of individual agreements.
Where people work also affects how they fare in the individual agreement stakes. Fifteen per cent of workers are employed in small enterprises on individual contracts. They earn $177 a week less than individual contract workers in larger enterprises. While lower average wages are a universal feature of small businesses, collective agreement workers in this sector earn $37 a week more than those on individual agreements.
It is not just low paid workers whose pay packets are dwindling under individual contracts. Tradespeople, associate professionals and advanced clerical and service workers are also paid less on individual contracts than collective agreements. Workers in mining, construction, transport and storage, education, health and community services, and personal and other services earn higher total weekly wages under collective agreements, rather than individual contracts.
As the above figures are based on average earnings data, they do not do justice to the disadvantage AWA employees are really experiencing. Median incomes provide a more telling indication of the distribution of earnings.
In 2004, the median total weekly earnings for full-time non-managerial workers on individual agreements was $814. Those on collective agreements earn 11% more at $904 a week. Individual agreements are only paying off for those in the top 25% of income earners, that is, those earning over $1059 a week. Three-quarters of individual agreement workers are financially worse off than their counterparts on collective agreements.
The ABS figures provide a clearer understanding of the complex impacts of the growth in individual contracts. It is not just the marginalised segments of labour who are vulnerable to this trend. Major cross-sections of the Australian workforce are at risk of shrinking real wages, let alone conditions. Full-time and skilled workers are just as likely to bear the brunt of the changes as causal, part-time, female and small enterprise employees.
These industrial developments call into question the capacity of the neo-liberal market economy to reconcile endless dividends to shareholders on the one hand, with the creation of sufficient, sustainable, well-paid and meaningful work for all those who want it on the other.
From Green Left Weekly, August 17, 2005.
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