Last week the Australian Council of Trade Unions president Sally McManus invoked the IR-version of “OK Boomer” when she accused the bespectacled, soft-spoken Lowe of “living in Boomer fantasy land”. She was provoked by Lowe expressing concern that too-high wages growth would further fuel inflation.
After years of cowering in the shadows of Workchoices, industrial relations are back, baby.
At 50, McManus is a member of Generation X, historically the classic middle child of the generation wars. Its members generally have no wish to draw attention to themselves.
But McManus was apparently incensed by Lowe’s speech, in which he said he wanted wage growth to be capped at about 3.5 per cent, as an “anchoring point”.
“If wage increases become common in the 4 and 5 per cent range then it is going to be harder to return inflation to 2.5 per cent,” Lowe said.
He has previously said he expects inflation to reach 7 per cent this year, so he is essentially stating he wants real wages to go backwards (albeit at a slower rate than they are currently). He is worried (as is the new Labor government) about the prospect of a wage-price spiral, even though all sides agree that inflation is currently driven by external and global factors, not rising wages.
Enter McManus, who intimated Lowe had lost touch with reality. “All of this is just a fantasy because they don’t understand what actually happens at the bargaining table,” she told ABC RN. The wage price index was not even close to 3.5 per cent, “let alone 5 per cent, let alone 7 per cent”.
“And so to think somehow that the system is going to deliver across-the-board pay increases of 5 or 7 per cent is Boomer fantasy land,” she said. “Not realising that whole system would be incapable of delivering that. We do not have centralised bargaining in this country. It would not be possible for that to happen.”
It’s hard to imagine Australia’s industrial relations system delivering the kind of wages breakouts that fuelled the “stagflation” of the 1970s because most of the workforce is not covered by centralised wage-fixing. In the ’70s, more than half the workforce was unionised – now it is more like 14 per cent.
So the idea that large-scale, across-the-board pay rises will fuel spiralling prices is unlikely, although formal award wage rises probably do form a kind of unofficial benchmark for other workers.
McManus also told RN the Reserve Bank board “doesn’t have anyone there who participates in negotiations for wages or the wage-setting system from the workers’ side”. Unionists have been excluded from the RBA board since John Howard was prime minister.
The new Labor government is stuck in the middle.
While it strongly encouraged the Fair Work Commission to deliver its recent decision (the FWC increased wages for lowest-paid award workers by between 4.6 per cent and 5.2 per cent), it has stopped there.
Boomers are so often blamed for our society’s inequalities that I am starting to feel sorry for them (and for Phil Lowe, his problems are extremely gnarly). Boomer vilification is reductive and ignores the central truth of many Boomers’ lives: that they took advantage of free education to rise out of the working class, worked hard to build wealth from nothing, and ploughed the proceeds into housing.
Boomer vilification also distracts from genuine economic inequality – no one could suggest that a 22-year-old disability care worker and a 22-year-old banker have much economic interest in common, just because they’re of the same generation.
But the Boomers did also get lucky, and that luck has continued in the form of successive governments too afraid to end it.
The older generation owes it to younger generations to allow the rolling back of generous superannuation tax perks and property investment tax incentives, and to direct serious political capital into the stubborn problems of housing affordability and climate change.
Then maybe the jokes will ease. OK, Boomer?
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