Danger from Trades Hall

The push for a 36-hour week in the construction industry has nothing to do with workers having more leisure.

It is about having overtime pay kick in quicker.

In its own evidence before the Federal Court, the construction union, the giant CFMEU, said that projects were planned on an overtime basis, that workers could not, in a practical sense, refuse overtime and that six-day weeks were common.

So, the 36-hour week campaign is not about sharing work around, it's about increased pay.

Which is fine.  It is perfectly reasonable that unions or any group of workers should seek increased wages.

And there is nothing wrong with using a 36 hour week message as a smokescreen.

What is not reasonable is if the unions seek to bar other people be from making a different offer.

Modern unionism should be all about the union being a bargaining agent within the labour market.

The unions need to prove their worth to maintain membership by demonstrating that they add value, that they can persuade employers to offer better wages and conditions than the individual worker might obtain.

Old unionism, which is alive and well in many quarters of Trades Hall, sought to fix wages and to prevent any other workers offering to undercut these.  "No ticket, no start" was the familiar slogan.

This has its counterpart today with the 36-hour push being accompanied by stopping competition from contract labour.

Unions have been losing their market share for over a quarter of a century.  Only about one fifth of private sector workers are now union members.

One strategy is to use the highly unionised Victorian construction industry, a tight labour market and a possibly sympathetic Bracks Government as a means to reversing that decline.

This makes sense as there are a raft of certified agreements due to expire in June next year.

The downside of excluding competition, such as contract labour, is that a union monopoly extracts excessive wage costs.

From the construction industry, these are passed on to the taxpayer (though higher costs on public works) and the consumer (more expensive buildings and higher rents).

In contrast to construction, the continued dominance of independent contractors in house building has given us one of the lowest-cost new home industry in the world.

Numerous attempts over the years to force housing workers to unionise have failed, to the immense benefit of the home-buyer.

Across a great many industries increased productivity is seen where contracted rather than union dominated in-house workers are used.

This is why BHP could offer its workers more money if they went on individual contracts.

Those contracts allow it to do away with work practices which get in the way of productivity.

Higher productivity means lower costs per unit of production, which means BHP can pay its workers more.

Lack of competition through the closed-shop protects work practices which are drags on productivity.

Victorian Industrial Relations Minister Monica Gould has been supporting a raft of increased entitlements such as tacking on the entitlements of permanent employees to casual workers.

What she does not seem to understand is that Victoria competes with other states.

We compete for tourists, for investment money and across the range of industries.  Higher costs without higher productivity means jobs lost

It is not the 36 hour week or any other demand that spell danger.  Rather it is the creation and expansion of labour-supply monopolies and centrally-imposed conditions.

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