Nobel laureate Joseph Stiglitz warns on penalty rates cut

14 November 2018
Sydney Morning Herald


Nobel prize winning economist Joseph Stiglitz has backed unions on penalty rates, saying cuts to Sunday rates in Australia are an indication that workers’ power has been eroded.

"The economy is supposed to be helping increase people's living standards - and part of living standards is enjoying leisure," Professor Stiglitz said.

"If you have to work on a Sunday, you should get compensated ... And the background of this [is that] the bargaining power of workers has been eviscerated. They would want to say 'I don't want to work on a Sunday' - but they can't say that."


Joseph Stiglitz, economics professor at Columbia University, says governments must act to address inequality.

The respected American economist and Columbia University professor, who is in Australia to accept the Sydney Peace Prize, also supports the Australian Council of Trade Unions' demand for industry-wide bargaining, which he sees as necessary to address weak wage growth.


"When you don't have any collective voice for workers, obviously workers are not going to do as well," he said.

It comes as the latest data from the Australian Bureau of Statistics reveals that hourly pay rates increased 2.3 per cent nationally over the past 12 months, marking the highest annual growth rate in three years.

Industrial Relations Minister Kelly O'Dwyer said the figures were "encouraging and show wages are heading in the right direction".

But unions argue the increase, which came after the Fair Work Commission raised the minimum wage by 3.5 per cent, is insufficient to offset the rising cost of living.

In a speech at the National Press Club in Canberra on Wednesday, Professor Stiglitz called on governments to address inequality and warned that doing so was crucial to a well-performing economy.

He urged Australia to learn from the mistakes of the United States, where he said worker rights had been eroded through a series of policy failures based on trickle-down economics.

"It used to be that we thought that you could only get more equality by sacrificing economic growth," he said.

"That view is no longer accepted ... Having a progressive agenda with greater equality leads to higher economic growth and that higher economic growth then generates more tax revenue-  and that more tax revenue gives you a source of funding for more progressive reforms that can make a more inclusive society."

Labour, competition and taxation laws had been restructured in a way that led to "slower economic growth and more inequality", he said, adding: "What paltry economic growth has occurred, the benefits have all gone to the top."   

Professor Stiglitz said large segments of the population had been locked out of the middle class as corporations increased their profit margins while refusing to pass on productivity gains to workers.

He said penalty rates should not be eroded, and that governments must act to protect workers.

"Having a life where you don't get the same time off that everyone else does is really interfering with your wellbeing," he said.

"That's why there's a really important role for a government to set hours and overtime standards."

The Fair Work Commission decided to cut Sunday and public holiday penalty rates for full-time and part-time workers in February.   

Opposition Leader Bill Shorten has promised to reverse penalty rate cuts within 100 days of a Labor government being elected.   

The Morrison government supports the Fair Work Commission's decision to cut penalty rates.

Mr Shorten has also said he will consider the ACTU's industry wide bargaining proposal, which would empower workers to strike across industries.

But many expect Labor to support a watered-down version, restricting pattern bargaining to particular sectors in which workers have struggled to negotiate pay rises, such as childcare.

Unions lost a bid to overturn the commission's penalty rates decision in the Federal Court last month.

Hospitality workers' Sunday rates were cut from 175 per cent of their standard wage to 150 per cent; in the retail sector, the drop was from 200 per cent to 150 per cent.

The public holiday cuts came into effect on July 1, while the Sunday penalty rate cuts are being introduced over several years.

whiteknight wrote on Nov 16^th, 2018 at 5:27am:



theres that word "collective " again.
the mark of the socialist utopia.

how about we treat each worker with the dignity and respect owing to him / her as an "individual."

Nobel Prize-winner endorses sector bargaining   
14 November 2018
ACTU

Nobel Prize-winning economist and former World Bank chief economist Professor Joseph Stiglitz has endorsed industry and sector bargaining as an answer to slow wages growth.

Speaking ahead of his National Press Club address in Canberra today, Professor Stiglitz told The Australian that allowing sector wide or nation-wide bargaining would boost pay packets.

“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.

He said the laws needed to be changed including laws which had undermined unionization so that the collective action of workers to defend themselves against employers has been weakened.

Professor Stiglitz said that business lobby opposition to such a proposal was evidence that it would be effective.

“The fact that it’s so controversial with employers coming down against it is, in a way, some evidence that it works because if it didn’t make any difference they wouldn’t be opposing it.”



Quotes attributable to ACTU President Michele O’Neil:

“Australia was one of the first countries in the world to win the right to a living wage.

“The Abbott/Turnbull/Morrison Government have relentlessly attacked that right, and attacked our ability join together in a union to protect it.

“They cling to their failed trickle-down economic experiment saying that by giving big business more money they will lift wages. That hasn’t happened and it won’t happen.

“The ‘enterprise only’ bargaining model is in crisis. There are 500,000 fewer workers covered by EBAs today than just three years ago.

“Working people need to be able to negotiate a fair deal with real decision-makers. This means being able to sit down and negotiate agreements across multiple employers, sectors or industries.

“This idea is endorsed by the internationally renowned Nobel Prize-winner for economics Joseph Stiglitz as the solution to slow wage growth.

“It’s time to change the rules so working people can negotiate fair pay rises and more secure jobs by negotiating with more than one employer at a time.”

My God the dead in the water union propaganda parrot hypocrite BlackDay is STILL gnawing on this cold and dead chestnut.

Geggy shows why he is universally ignored as the Village Idiot - out of touch and out of his depth.

What would Geggy know about it - he wouldn't work in an iron lung!!!!

What would Geggy know about it - he wouldn't work in an iron lung!!!!

greggerypeccary wrote on Nov 16^th, 2018 at 10:45am:

The Lefties have very short memories when the TRUTH is involved. And silly dumb Geggy just wants to make a noise to try to get noticed.

Is there no limit to the Lefties lying hypocrisy ? Of course not they thrive on lying and denying.

The unions HATE small business because they represent a capitalist threat to Socialist insanity.

Go Geggy go!!!  You might get even worse if you really try.



greggerypeccary wrote on Nov 16^th, 2018 at 11:05am:

greggerypeccary wrote on Nov 16^th, 2018 at 10:45am:


Sorry Greg but the Boot test is worthless junk it actually undermines wages.

However the workers mentioned have just signed another enterprise agreement on similar terms because they are better off even though it isn't great.

The boot test is only good to undermine any above award pay and especially conditions.

One of the larger problems with negotiating enterprise agreements is that the business does not have to release any commercial information. This effectivly means that when the employer says that they have done the sums and the employees are better off the employees and Unions have no means to confirm that it is correct.

In the case of the numbers from the poster this is exactly what happened. The employer assured everyone including the fair work umpire that employees were better off.

The difference between them being better off and not was simply a matter of the rostering used. Turns out that in some of those companies employees were not better off.

Part of the problem is that if they go back to the award they lose non award conditions like extra breaks and discount cards which have significant value.

There is still a huge problem in IR and the unions are far from perfect but the employer side has way too much power and umpire is useless the rule book was flawed and biased from the start.

They almost need to throw it all out and start again.

salad in wrote on Nov 17^th, 2018 at 9:23am:


You post an entitled idiot in Forbes magazine defending the right to wealth and still think that trickle down is credible ?

The rich getting ever richer has ZERO benefit to the poor.

Stiglitz is not 100% right on everything he concludes but he is clearly streets ahead of this clown.