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).