A legislative consensus reached over the weekend to approve reforms to industrial relations laws sets the stage for rebuilding collective bargaining and a significant acceleration of wage growth, according to research from the Australia Institute’s Centre for Future Work.
“These reforms will lift wage growth and improve fairness in workplaces across Australia, big and small, in all sectors of the economy,” said Dr Jim Stanford, Economist and Director of the Centre for Future Work.
Research published by the Centre for Future Work suggests collective bargaining coverage will rebound under the new laws. Bargaining coverage in Australia has declined dramatically since 2013, with just 11% of private sector workers now covered by a current enterprise agreement.
Based on the historical relationship between bargaining coverage and wage growth, rebuilding coverage toward pre-2013 levels will lift nominal wage growth by 1.6 percentage points per year, lifting annual incomes for a typical worker by almost $1500 in just one year.
Related research
Going Nuclear: The Costs of Mid-Bargaining Termination of Enterprise Agreements
Collective Bargaining and Wage Growth in Australia (Full report)