hereafter IN&dquo;orkplace Relations Act) provided a new formal framework for wages policy and wage determination. It became the third change of this nature in five years. Despite the rhetoric, this is not the latest phase in the inevitable 'deregulation' of the Australian labour market. On the contrary, developments throughout the year confirmed the continuing relevance of Polanyi's famous dictum: laissezfaii-e has to be planned.' Like all 'deregulatory' projects (including those of the former Labor government) the new Act simply changed the form of regulation. This involved a realignment of the different elements of the Australian wages system: some are weakened (e.g. awards) while others are strengthened (e.g. management prerogative and individual employment contracts). This tendency was not, however, universal or uncontested. Awards remain the only source of wage movements for a third of Australian workers. In addition, many employers continued to bargain collectively with unions, in some cases on a multi-employer basis. Hence, while public policy promoted greater employer choice and individual agreements, a number of key players have adopted different approaches. Because of this, the practice of wage determination is far more complex and diverse than is commonly assumed among most politicians, policy makers and especially commentators in the financial press. This article begins with an overview of the economic context that prevailed in 1997, highlighting the importance of the ultra-low inflation environment that emerged during the year. Key developments at national and state level are then examined. The most significant of these concerned decisions about the role of awards in the wages system and the steady emergence of non-union agreements, both collective and individual. Tensions between the different types of wage determination were most apparent in the coal mining industry, where a number of intense and protracted disputes dragged on throughout the year. In addition, both the political and industrial wings of the labour movement unveiled new approaches to wages policy, shifting emphasis away from thehighly decentralised approach they had previously promoted. Developments in key industries are then analysed. These reveal that wage increases in enterprise agreements are not the only (or even the major) source of wage 1. K.
Fundamental tensions embedded in the Australian system of wage determination became apparent in 1995. Awards remained an important, indeed the only source of improvement in wages and working conditions for around one-third of the workforce. Registered enterprise agreements involving management and unions also consolidated their position as an important source of wage increases and employment regulation for a similar proportion of workers.' Despite fears among finance sector and media commentators that these would result in a union-driven 'wages blowout', such inflationary pressures did not eventuate. Arguably, the major developments during the year were a number of major disruptions to the industrial relations systems caused by non-union agreements. While such agreements did not increase in labour market significance (continuing to cover only a minority of workers), their institutional significance increased greatly, in part because of the recent changes in industrial law at both federal and state level. Some of the most controversial developments occurred as a result of some employers pursuing aggressive non-union industrial relations policies based on individual contracts of employment.Economic and political context Throughout the year the economy continued to grow, although at a slower pace than in 1994. The September National Accounts revealed an annual rate of growth of 3.3 per cent .2 While representing a slow-down, these figures were stronger than expected and represented the seventeenth consecutive quarter of economic growth. As the year progressed inflation became an issue of concern. This fuelled speculation that the much feared 'wages blowout' was finally under way. By the September quarter, the Consumer Price Index had reached 5.1 per cent, the highest annual rate in nearly five years. Moreover, the underlying rate of inflation (which effectively factors out increases generated by government policy) had reached 3.1 per cent, slightly above the 2 to 3 per cent target of the Reserve Bank and Accord Mark Vlll. ' Average weekly earnings had also crept upwards during the year. By September, average weekly ordinary time earnings were growing at an annual rate of 5.1 I
In 1999 wages in Australia continued to be set in a context ofstrong economic growth and increasing inequality. While employers at enterprise level generally held the upper hand in wage setting, employers as a group showed little interest in taking responsibility for system-wide innovation and renewal in the wages system. In the course of the year a number of challenges emerged to the upward trajectory of inequality in general and neo-liberal policies in particular. Important as these developments were, they did not seriously unsettle the ensemble of inequitable practices and policies that have underpinned economic development. These themes emerge from a consideration of the key developments in wages and wage determination in 1999. The article begins by considering the major political and economic developments of relevance to wage issues during the year. An overview is then provided of wage outcomes and key policy developments at national and state levels. This is followed by consideration of how these issues have been handled in leading industrial sectors. Particular attention is devoted to the problem of pay equity. The significance of changing workplace and labour market structures for wage determination is then considered. The paper concludes by noting the importance of understanding wages and wage determination in the context of larger circuits of consumption and investment. Without such an understanding too much policy and analytical attention is devoted to the more visible elements of the wage system and too little to the key forces shaping contemporary wage and employment structures.In 1999 wages in Australia continued to be set in a context of strong economic growth and increasing inequality. While the wages system contributed to this situation, it was by no means the sole determinant. Practices and policies concerning consumption and investment have been just as important, if not more so. The almost undisputed ascendancy of shareholder value as the principal, if not sole, criterion for economic success continued to drive a wide array of costcutting and risk-shifting initiatives. These, in turn, have driven changes to modes of engagement (such as casualisation) and business unit settings (such as outsourcing), which profoundly shaped not only people's experiences of work but also the objective context in which wages were set. Equally, rising levels of income inequality continued to create a context in which the income-rich but time-poor created growing demand for the services of the time-rich and incomepoor.' The wages system that has been emerging since 1991 (and subsequently
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