Collective Bargaining and Wage Growth in Australia

by Jim Stanford, Fiona Macdonald and Lily Raynes

The reforms proposed in the Secure Jobs, Better Wages bill represent important but incremental steps in restoring a better balance of bargaining power between workers and employers, and lifting wage growth back toward a normal and healthier pace.

The measures provided here will not suddenly transform Australia in the image of leading OECD countries, where centralised and coordinated collective bargaining covers most workers, and wage outcomes are much more equal as a result. But they would support a gradual restoration of collective bargaining coverage, consistent with practices in other countries where bargaining still occurs mostly at the enterprise level – but where some broader bargaining and coordination is possible. On that basis, and over several years, this should result in a partial restoration of bargaining coverage lost over the past decade, and a corresponding (but still incomplete) recovery in wage growth.

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