The Inaugural Laurie Carmichael Lecture with Professor Joseph E. Stiglitz: The Economic Benefits of Trade Unions
Nobel Laureate, former World Bank Chief Economist, and best-selling author Professor Joseph E. Stiglitz toured Australia in July 2022 courtsey of The Australia Institute, to discuss the need to expand the role of governments, unions, and civil society. His call for a windfall profits tax made national headlines.
The tour, hosted by the Australia Institute, saw Professor Stiglitz speak to the Prime Minister, the Treasurer, national television and news outlets, and at a wide range of events for the general public, policymakers, unions, civil society, investors and philanthropists.
Professor Stiglitz's final public speaking engagement saw him deliver the Inaugural Laurie Carmichael Lecture on the Economic Benefits of Trade Unions. Professor Stiglitz spoke to a sold-out Capitol Theatre in Melbourne, with the event supported by RMIT University, the Australian Council of Trade Unions, the Australian Manufacturing Workers Union, the Australian Education Union and the Victorian Government Department of Education and Training.
A number of key themes emerged from Professor Stiglitz's talk, which is available here. Professor Stiglitz drew attention to key facts and realities of the union movement - not only in Australia, but across the world:
- Unions were invented because living standards declined for most people during Industrial Revolution, despite huge gains in output and productivity.
- In the centuries since, it is clear that without the countervailing power that comes with a union, workers will not win a share of the gains of economic growth and higher productivity.
- Unions are a specific example of ‘collective action’, whereby people come together to solve economic problems that cannot be managed through market interactions alone.
- Income inequality, which is made worse when unions are weak, undermines productivity and innovation. Employers face little incentive to improve technology and productivity when labour is available at very low wages.
- By providing workers with safe and reliable voice in workplaces, unions are a vital channel for conveying information that can also boost productivity.
- Unions have also played a vital role in protecting health and safety, including during the COVID-19 pandemic.
- Shifts in the sectoral make-up of the economy (toward more services), and the growing role of smaller businesses, make it harder to organise unions by traditional methods. That’s why new systems (such as sectoral or pattern bargaining) are needed to allow workers to negotiate across employers and workplaces.
- Prof Stiglitz concluded with an agenda of recommendations to improve workers’ economic situation. These recommendations included:
- Sectoral or pattern bargaining to improve workers’ bargaining power, especially in industries with highly fragmented business structure;
- Measures to enhance workers’ voice in workplaces;
- Reducing restrictions on union organising and union activity;
- Improving competition laws so that large companies cannot take concerted action (such as non-compete clauses) to drive down wages; and
- Providing workers with seats on boards of directors, and a representative of workers on the board of the RBA.
The Carmichael Centre is grateful to the cooperation and support of its event partners, RMIT University, the ACTU, AMWU, AEU, the Department of Education and Training Victoria, and The Australia Institute.
The full recording of the lecture can be viewed below, as can an interview of Professor Stiglitz ahead of the Inaugural Carmichael Lecture (courtesy of the ACTU).
The Wages Crisis: Revisited, co-authored by Professor Andrew Stewart, Dr Jim Stanford, and Associate Professor Tess Hardy, makes an important contribution to the national debate on the wages crisis, which became a central feature of the Federal election campaign. The report provides a helpful analysis and evidence of the wages crisis, using several complementary measures to substantiate the labour movement claims that workers’ real wages have, and are, falling; that there is a crisis in wages and inequality; and that action is required to reverse the trend of falling real wages.
The report correctly credited consumer spending with driving pandemic recovery, noting that:
“Through the first year of recovery from the initial lockdowns (from the June quarter 2020, the low point of the recession, to the June quarter of 2021), increased household consumer spending accounted for 80% of the total expansion in real GDP. Household spending on new residences accounted for another 15%. All told, consumers thus carried 95% of the weight of post-COVID recovery”.
One factor the report overlooked is the impact of the Government’s decision to allow workers to raid their retirement savings held in trust in superannuation funds. Around three million workers withdrew some $37 billion from their superannuation accounts to supplement their discretionary expenditure during the pandemic. That accounted for around 30 per cent of the net transfers to households during the pandemic. The key point that the paper could have identified from this fact, given the theme of the paper, is the long-term detrimental effect on workers’ life cycle living standards.Read more
I first came across Laurie Carmichael in November 2020. Desperate to meet the looming deadline to submit a thesis proposal, I had spent days frantically leaping down academic rabbit holes in search of a suitable Honours topic. But after stumbling across Carmichael and the Prices and Incomes Accord, I knew I had found someone (and something) worth writing about.
Carmichael’s career was an exemplar of a lifelong dedication to solidarity and the working class. His innovative approach to trade union politics during the Accord years (1983-1996) has enduring significance for the Australian left – as it was Carmichael’s political and industrial strategies that helped guide the labour movement through this extremely difficult restructuring period.
Carmichael was the archetype of a battle-hardened 20th century unionist. Born in the working-class Melbourne suburb of Coburg in 1925, Carmichael – like so many members of his generation – was profoundly affected by the scarcity and harshness of the Great Depression. Deeply impacted by his family and friends struggle with unemployment during these years, Carmichael left school at age 14 in pursuit of a vocational career and the stable income it could provide.
After his departure from school, Carmichael progressed steadily along the radical pathway. From age 15, he was involved in the Eureka Youth League – the official youth wing of the Communist Party of Australia (CPA). By 18, he was an official CPA member. In 1943, Carmichael also enlisted in the RAAF to fight fascism overseas. And, had Laurie not contracted rheumatic fever while completing air force training at the MCG, he may very well have done so. Following his days of service, Carmichael completed his fitter’s apprenticeship and found work at the Williamstown dockyards in Melbourne.
At the dockyards, Laurie escalated his involvement with the CPA and the Amalgamated Engineering Union (AEU) – the CPA-affiliated union to which he belonged. Gifted with an impressive public speaking capacity and a ravenous appetite for socialist literature, Laurie’s potential for radical leadership was quickly recognised at the AEU. Twelve months after arriving at the dockyards, Laurie was elected shop steward, and within a decade he was appointed district committee secretary (the highest AEU position in Victoria). `
With the AEU securely under his progressive leadership thereafter, Carmichael went on to lead his union through the major political upheavals of the 1960s and 1970s. Indeed, Laurie was seemingly at the forefront of every progressive campaign in Australia from the 1960s onwards. For example, Carmichael was an outspoken opponent of the Vietnam War. Many alive at the time still remember the frantic scenes at the Williamstown Court House in 1969, where Laurie, appalled by the conflict as both a father and a communist, was arrested alongside his wife Val for protesting their son Laurie Jnr’s conscription.
Equally as remarkable was Carmichael’s role in the general strike of 1969. As one of the first leaders of a major union to publicly call for a general strike against the federal government’s penal powers, Laurie was instrumental in delivering what is widely considered to be one of the greatest trade union victories in Australian history.
Rapid Antigen Tests (RATs) are an essential part of the Coalition government’s new policy framework for the current “Omicron phase” of the pandemic. RATs are essential for workplaces, schools, nursing homes and other locations at the heart of daily life.
It is false to assume that Omicron is less damaging than Delta, or even that Delta has gone away. The other obvious risk is that there will be another mutation into a new variant, requiring a new response.
The main purpose of the RATs is to get workers back in production and distribution, so that profit-making does not fall. It’s workers who make the economic world go around, not the businesses that employ them.
Deliberately, the government has set this policy knowing that there is insufficient supply of RATs to match the requirements of its own policy. Meanwhile, the supply chain crisis distracts from the making and supply of PCR tests.
Australia, overwhelmingly, relies on offshore manufacturing of RATs, but it didn’t have to be this way – and it still does not. Dependence on imported RATs could and should have been avoided. Locally made RATs have been possible but neglected or ignored.
Recently, the ABC reported on the potential for Australian mass manufacturing of RATs, but producers claimed they had received little support from the government to develop this capacity. One Australian firm has now set up manufacturing operations in the USA. In fact, the ABC report appeared the same day that the government confirmed the closure of 2 flagship funding schemes that would have helped these manufacturers and their potential workforces (see below).Read more
A new report from the Carmichael Centre, Rebuilding Vehicle Manufacture in Australia: Industrial Opportunities in an Electrified Future details how the global transition to EV manufacturing is an enormous opportunity for Australia to rebuild its vehicle manufacturing industry. The report, written by Laurie Carmichael Distinguished Research Fellow, Dr Mark Dean, details how an EV-driven industrial future contains significant opportunities to take advantage of our competitive strengths in renewable energy, extractive industries, manufacturing capabilities and skilled workers.
Australia possesses many of the crucial elements for an EV manufacturing industry:
- Rich mineral reserves,
- An advanced industrial base,
- A highly skilled workforce, and
- Consumer interest.
The benefits of an EV manufacturing industry would be significant for our economy, society, and environment, and include:
- Tens of thousands of good-quality manufacturing jobs.
- Stimulus for further development of a high-technology supply chain.
- Opportunity to utilise Australian mineral resources (including lithium and other rare earths) in value-added industries, thus expanding their value many times over.
- Diversifying Australia’s export profile and reducing our dependence on raw resource extraction and export.
- Complementing and reinforcing our accelerating transition toward non-polluting energy sources and systems.
- Spurring enhanced innovation, research, and engineering activity in Australia – still recovering from the closure of mass vehicle manufacturing in the mid-2010s.
Osborne is a suburb in Adelaide’s north, sandwiched between the Port River and the Gulf. It has one major industry – shipbuilding – at the Australian Submarine Corporation (ASC).
At its peak, when producing the Collins-class submarines, under the memorably-named Hans Ohff, it employed around 2,000, mostly highly-skilled, workers. Many skilled tradespeople, technicians and engineers got their start there; it was a strong union shop as well.
The announcement of the new submarine project gave the workers at Osborne and ASC a new lease on life. Economic shock hit Adelaide’s northern suburbs when the car industry closed. First Mitsubishi in the late-1990s, and then most drastically, General Motors-Holden, closed after the policy effects of the federal government’s “lifters versus leaners” rhetoric denied any financial support to a car industry still reeling from the GFC. The Elizabeth area where Holden was located registered 30% unemployment after Holden closed in 2017.
During his brief time as Prime Minister, Tony Abbott tried to convince the Australian defence establishment that purchasing the Japanese Soryu-class submarine “off-the-shelf” was a smart strategic decision. This decision was condemned by that same defence establishment – but just as importantly by the workers and the communities of which they were a part.Read more
By Sarah Kaine
In February 2016, Cathy Brigden and I sat drinking tea during a break in the annual AIRAANZ (Association of Industrial Relations Academics, Australia and New Zealand) Conference and began talking about the types of research projects we would ideally like to undertake. It didn’t take us very long to narrow it down, we were both interested in labour history, union renewal, the experience of women at work and voice at work.
We were also concerned that the rich and valuable contributions made by women in the labour movement were rarely acknowledged in contrast to the more frequently chronicled contributions of men. Part of this concern was that the activism and achievements of women in the movement were/are often invisible due to the historical legacy of fewer women holding official leadership positions in union structures. So – we landed on a project which we hoped would be part of efforts to address this - an oral history project to collect the stories of women activists – in their own words and in their own voices.Read more
The broad range of Just Transition proposals are necessary, but not adequate, to reverse climate heating. These proposals must be synthesized into a Democratic Just Transition that pursues an open-ended programme and strategy for transitions that unite all workers and communities.
For better or for worse there is now a plethora of “Just Transition” (JT) concepts and programmes. These are a response to the crisis facing humanity and the natural world with global heating. In some countries they are also described as a “Green New Deal” (GND). All of these and probably more will be promoted by their champions as humanity heads towards the Conference of the Parties (COP 26) in Glasgow in late October.[i] Many, but not all of them, contain rich material that shows what can be done to reverse the momentum of climate crisis by 2030.
However, the plethora of JT proposals and the ideas behind them can itself be an obstacle to winning the changes of direction that are required before 2030 and, that cannot be reversed after that. Some share commonalities and are seriously researched, with specific and detailed strategies for broad action. Others are conceptual or narrowly focused. Some proposals argue that the climate and economic crises are interconnected. Key examples of Just Transition proposals can be viewed here, and here[ii]. Some proposals have been reviewed to demonstrate that the response must move the economy beyond capitalism.
How do we assess, from the point of view of workers, the different ideas and programmes that come before us? How do we synthesize a programme that can unite peoples’ mass organisations in a focused effort that more adequately forces change in the face of opposition?
In 1977 Laurie Carmichael, former President of the CPA, ACTU Assistant Secretary and AMWU Assistant National Secretary[iii], set out the why and how to put together a Peoples Economic Programme for those times (click here). He emphasized a clear critical analysis of the prevailing macro situation – the continuity and changes in the development of capitalism happening at that time.
Carmichael’s lecture (later a pamphlet) suggests a framework to help us in the union movement and the broad left to evaluate what is being put forward in our times and, to help synthesize what is available into a “programme of and by the people”.Read more
A sustainable social, political and environmental response to the "twin crises" of the COVID-19 pandemic and climate change will require policymaking beyond capitalism. Only by achieving a post-growth response to these crises can we meaningfully shape a future of jobs in renewable-powered industries shaped by organised labour, democratic values and public institutions. Anything less will merely create more markets and more technocratic fixes that reinforce the growing social and environmental inequalities that our current political system cannot overcome.
As Australia moves further away from anything resembling a sustainable pathway to reach these goals (i.e., $90bn submarines that we will not see for at least 20 years but no meaningful action on climate change), a new Labour and Industry article - co-authored by Laurie Carmichael Distinguished Research Fellow Mark Dean and Centre for Future Work Associate, Professor Al Rainnie analyses four alternative responses proposed by Australian unions, climate change groups and grassroots community organisations.
The first 50 downloads of the article are free and a pre-print of the article is available at the Carmichael Centre website here.Read more
The below is an excerpt from a speech delivered by Bill Kelty, Secretary of the Australian Council of Trade Unions from 1983-2000 about Laurie Carmichael's life, accomplishments, impact on the labour movement and Australian politics, and the legacy he leaves today.
Laurie Carmichael … was probably involved directly and indirectly with more industrial disputes than any other individual unionists, yet was a person of peace, persuasion, humanity and humility.
The Early Days
Born in 1926, Laurie Carmichael came from a ‘fairly poor family’ – his father an iron moulder. The sheer exhaustion of the work left an indelible mark on his life. The appreciation of the working ethos of families struggling to survive in the toughest of economic times. His poor health and his innate search for knowledge sent him to the local Library. ‘I would be studying music when others would be playing football’.
As [Carmichael] was growing up in the thirties the depression and the development in world politics would frame his political and industrial view for a lifetime:
“One could not live at the time without being affected one way or another by the polarization of society under the impact of Naziism on the one hand and democracy on the other".
[Carmichael] went to the Soviet Union in 1979. I saw him when he came back. He had been changed forever. On his first day they offered him women when all he wanted was a good cup of tea. On the second day when he put forward an interpretation of communism that was more liberal and practical, he was asked to leave.
Carmichael’s communism was a complex philosophy. He believed that capitalist societies generated an inherent contradiction that would eventually lead to their transformation. He believed that unions could be agents to change societies. The ultimate state was to give people more independence and self-belief. Left to its own devices, the power of capital would stagnate.
Carmichael’s view was that Industrial strength needed to be managed and developed and most importantly it must be applied for the benefit of all not just some.
For Carmichael the power of the union was real, but … [u]ltimately, class struggle was not confined to a workplace but for gender, race and the world at large.
[H]e was a unionist all his life believing in the power of working people to better their lives but understanding the importance of leadership and strategy.
Carmichael and the Unionists of the 1960s
Laurie joined the AEU [Amalgamated Engineering Union] on the first day he could. He remained a member for his entire life. By the time he was 24 he was a shop steward at the Dockyard. In 1951 he was elected to the Melbourne District Committee. He was 33 when he became Secretary in 1958.
His first major industrial campaign was to increase annual leave from two weeks to three weeks. The NSW Labor Government had legislated for three weeks annual leave in NSW. In Victoria the leave provisions were covered by the Federal Metal Industry Award. The employer resented its extremism. The Victorian Government under Sir Henry Bolte refused to legislate similar conditions.
Carmichael went to the members, explained the position, developed the resolution in support of it, made the claims and initiated industrial action – targeting the key companies set back temporarily by the 1961 credit squeeze. By 1963 the Arbitration Court established three weeks as a standard provision.
The dispute with GMH, over wages and work organisation … sharpened and honed his industrial and political views. The Taylorist organisation of work, the lack of respect and understanding of the multicultural workplace, the inadequate return for workers and the capacity of multinational corporations to take the best from each national without contribution, confirmed his view of militancy but strengthened the commitment that a union had a greater responsibility than just wages – the quality of working life, education industrial democracy.
The employers in the industry, and the Liberal Government were joined by the main media, Bob Santamaria and even many in the ALP and ACTU continuously denounced him.Read more