|Nobel ambitions to revitalise unions|
by Ewin Hannan||14 Nov 2018|
|General News - Page 2 - 374 words - ID 1036136431 - Photo: No - Type: News Item - Size: 157.00cm2|
Nobel Prize-winning economist Joseph Stiglitz has backed laws allowing industry-wide bargaining by unions and workers to address weak wages growth.
Professor Stiglitz, who is visiting Australia to receive the Sydney Peace Prize, told The Australian the practice of companies banking productivity increases and not passing on wage rises was a consequences of governments using laws to weaken the bargaining power of workers.
"If you have sector-wide or even nationwide bargaining, the countries that have been most successful in preventing this deterioration of wages have been the countries that have more sectoral and national bargaining," he said yesterday.
"There are also laws that have undermined unionisation so the collective action of workers to defend themselves against employers has been weakened. So those laws have to change."
Professor Stiglitz, who will address the National Press Club in Canberra today, said industrywide bargaining had been effective in tackling wages growth.
"It's one of the reasons employers don't like it," he said.
"The fact it's so controversial, with employers coming down against it, is evidence it works because if it didn't make any difference, they wouldn't oppose it." Professor Stiglitz said worker productivity had increased while wages had stagnated: "Profit margins are so large .. there is no (evidence) firms would have to raise prices if wages went up."
He said the decline in union membership and union density had contributed to inequality.
He supported increases in the minimum wage and said there should be a broad objective that any worker with a full-time job was not living in poverty.
He said advances in technology would lead to a "larger economic pie so, in principle, if things are managed well, everybody could be better off".
"But a very large fraction of the innovations are what we call labour-replacing or laboursaving and the effect of that is to reduce the demand for labour and that means wages will go down.
"And that mean inequality will increase," he said.
Professor Stiglitz said policy decisions could be made to ensure that "unacceptable" outcome did not eventuate and workers shared in prosperity but "obviously a lot of people who are doing very well at the top don't want to share the gains so it is going to be a political conflict".
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