The Committee on Employment Opportunities viewed temporary wage subsidies as a means through which the current long-term unemployed could be brought back into the effective labour supply. Experience with wage subsidies suggests that they will lead to minimal job creation and a churning of the pool of unemployment.

The problem of long-term unemployment has, at last, taken centre stage in the policy debate with the publication of the Green Paper Restoring Full Employment. While economic growth will reduce the general level of unemployment, to return the long-term unemployed to work will require increased training and reduction of labour costs. More recently the concept of a ‘training wage’ whereby employers would be allowed to pay below the current award wage to previously long-term unemployed has received some support. The Green Paper did not give much attention to training wages, preferring instead to focus on wage subsidies. In this paper the case for wage adjustments is discussed and evaluated.

This paper presents an overview of industrial relations in Nordic countries. Key features are a high degree of centralisation, high levels of unionisation, a tripartite approach to government decision making and a keen interest in employee participation. The last decade has seen the onset of more turbulent economic forces, moves to decentralisation and a shift in wage determination towards a greater role for enterprise bargaining. Several parallels with Australian experience are explored. A critical difference is that Nordic unions have escaped the significant falls in membership suffered by Australian unions.

The Swedish industrial relations system has undergone significant changes in the past decade, as employers have vigorously pursued a strategy to decentralise the collective bargaining process. Issues of co-worker agreements and pay equity dominated the 1993 bargaining round, with employers seeking to limit the unions’ role to the enterprise level. Union membership levels, however, have remained high and there has been greater cooperation between blue and white collar union groups. The return of a Social Democratic led Government may see greater support for national agreements and representative forms of participation.

There has been an increase in the rate of youth unemployment since the 1960s. Initially this increase was masked by the increased number staying on in the education system and the resultant drop in the participation rate for the under 20 age group. It is contended that the compression of youth/adult wage relativities since the 1970s has affected both the demand and supply for young workers. Demand has dropped since the experience premium attached to adult wages has been reduced. In the context of unemployed adult workers, the latter will be preferred to younger workers and new entrants to the labour market. On the supply side increased relative wages have induced more young workers into the labour force, increased the participation rate for this age group, and thus further increased the rate of unemployment. The persistence of this problem over time has given rise to relatively high levels of long-term youth unemployment Policy options to remedy this social and economic problem are necessarily constrained. On the industrial relations front a constraint is trade union antipathy to youth wage reduction policies which could give rise to generalised wage reductions. This paper proposes the extension of the special provisions of awards which permit for reduced payments as a means of assuaging union concerns.

The premise of this paper is that when long-term unemployment reaches very high levels, increasingly costly forms of assistance, like job creation have to be used to redress the disadvantage the long-term unemployed encounter. It then goes on to argue that effective job creation requires a new institutional framework, regional or local employment boards formed by local business and community organisations. Such an institution is well placed to satisfy the many conflicting objectives of job creation, and would ensure the public funds are used imaginatively to the benefit of both the unemployed and the community as a whole.

In this paper, changes in Norwegian bargaining and participation since the end of the eighties are discussed in a twenty year perspective. It is argued that a corporatist bargaining structure has been reinstated as a pragmatic measure to handle a difficult economic situation. This is contrary to the general political sentiments which have prevailed since the beginning of the eighties. However, a new constellation of actors are emerging on the organisational level who may irreversibly change the bargaining structure. With regard to participation, the laws and institutions that were introduced during the 1970s are still in place. However, their content is changing from democratisation as a value by itself to a focus on productivity-improvement as the ultimate goal.

Analysis suggests that the higher the replacement ratio, that is the level of unemployment benefit relative to average earnings, the higher the level of unemployment is likely to be. This effect comes about in two main ways. The replacement ratio will influence both the rate of inflow into unemployment and the period for which people remain unemployed. The empirical evidence supports these propositions although the sensitivity of unemployment to changes in the replacement ratio is fairly weak. In the light of equity considerations reducing unemployment benefits as a policy weapon to counteract unemployment is thus not a viable option. Changing the rules relating to part-time earnings and unemployment benefit however could reduce long-term unemployment.

Direct participation in Denmark has been facilitated by agreements between employers and unions as well as a prevailing consensus about the value of cooperative arrangements. A revised Cooperation Agreement was achieved between the central union and employer organisations in 1986. It seeks to improve efficiency as well as enhancing employees’ welfare and security. This agreement has had a positive influence on the spread of participation in Danish industry. The paper examines, in greater detail, the experience of the banking and metal industries. Although Danish employers have generally advocated greater decentralisation, the Danish industrial relations system has retained a centralised framework within which direct participation has occurred.

The era of incomes policy agreements appears to have ended in Finland, with negotiations focused at sectoral and local levels, although this could change with a return to a Social Democratic-led Government. While representative systems of participation have not been abandoned, the authority of unions delegates at the workplace appears to have declined. There has also been a growth in direct forms of participation, initiated by management, and associated new forms of work organisation.

A number of well-publicised submissions advocating a ‘Job Creation Levy’ were made to the Committee. In its report, however, the Committee is lukewarm in relation to this option. The case for a levy in the form of an income tax surcharge can be made in terms of conventional welfare economics criteria and considerations of equity. The main case against the levy is that it will merely reshuffle the dole queue and, at the same time, create ‘artificial’ jobs at the expense of ‘real’ jobs. Moreover, there may be some undesirable implications for aggregate labour supply.

This paper outlines some of the deficiencies in the research evidence upon which we were able to draw in putting together the Western Australian Labour Market Research Centre’s submission to the Committee on Employment Opportunities, and some further deficiencies that have become evident from reading the Green Paper. Consequently some suggestions are made about further research needs. Broadly speaking, there are four types of research that appear to be necessary. Firstly, there is research which seeks to monitor and evaluate the specific effects of specific policies, such as those that are expected to result from the proposed Job Compact. Secondly, there is the more general research agenda on the operation of labour markets in Australia, which help to shed light on issues of relevance to policy decisions. Thirdly, there is a broader research agenda on issues associated with productivity, competitiveness and economic growth, bearing in mind the importance of a substantial and sustained increase in the underlying rate of economic growth. Finally, there is research which would improve our ability to undertake valuable future orientated scenario modelling simulations.

There has recently been intense debate about the relative merits of a centralised wage-setting system vis-a-vis a decentralised system. Most of the theoretical and empirical works on this issue focus on the static or current macroeconomic performance in terms of employment and inflation and microeconomic efficiency resulting from enhanced labour market flexibility. Following Lancaster’s work and subsequent extensions by Schott and Vartiainen, this paper regards wage bargaining as a dynamic game involving conflict over the distribution of current and future income. It is argued that the intertemporal decision makings of both workers and employers are influenced by so-called prisoners’ dilemma. In such situations, it is claimed that centralised or corporatist wage negotiations system leads to higher investment rates. This claim is corroborated with evidence from selected OECD countries.

This paper is a selective review of recent Australian research upon enterprise bargaining and workplace industrial relations. It begins with a discussion of data collection methods, pointing out some strengths and weaknesses of survey, case study, and agreement text analysis methods. It then focusses upon two substantive issues to test the success of research. The first concerns the infrastructure for enterprise bargaining. Our conclusion is that research illuminates this topic, and reveals general unreadiness. The second issue is productivity performance and enterprise bargaining. We are far more sceptical that research has proved a relation between the two. We conclude with the observation that researchers may be on the wrong track if they try to quantify the effects of enterprise bargaining on productivity performance. The paper recommends that greater attention be given to change management programmes designed to increase competitiveness, and to the outcomes sought from these, rather than to productivity.

As the process of corporatisation and privatisation of both State and Federal Government Business Enterprises gathers pace, increasing attention is being placed on the way in which these organisations are regulated. The Prices Surveillance Authority has recently proposed a change in the way it conducts surveillance of prices from a cost based system to a price cap system. Price capping, as a form of regulation, has been used extensively in the UK and the US for some time. The article argues that the lesson of this international experience is that price caps may not be the answer to the traditional problems associated with cost based regulation and that price caps may have additional disadvantages, particularly incentives for under investment, although it may have some other advantages. Some alternative regulatory options are then examined, mainly involving modifications to both cost based and price cap regulation.

This paper explores the relationship between unionism and quits. Three channels of influence are investigated: unions-collective voice-quits; unions-training-quits; unions-job dissatisfaction-quits. Estimates of each model, using data from the Australian Longitudinal Survey, indicate that unions reduce the probability of quitting via the training effect by 0.5 percentage points, they reduce the probability of quitting via the collective voice effect by 4 percentage points and they increase the probability of quitting via the job dissatisfaction effect by 1.2 percentage points. The net effect of unions is, therefore, to reduce the probability of quitting by around 3 percentage points.

Most studies of the role of the Australian Council of Trade Unions (ACTU) have argued that the peak-council has traditionally had little if any authority over its affiliates. This paper contends that this situation changed during the 1980s and that the ACTU achieved a significant degree of internal union authority. Examples of such authority are documented and the combination of external factors, such as the political and economic environment, and internal factors, such as leadership and reduced factionalism, that contributed to this growth of authority are analysed.

This paper examines new forms of work organisation which may emerge in the coming decade, as the distinction between white and blue collar work fades and occupational status is defined more in terms of skills and knowledge. Demarcation barriers between skilled and unskilled work, trades and professions will become less relevant as multiskilling and inter-changeability of personnel becomes a requirement in most organisations. The proportion of self employed in the workforce will also increase and most people will work on contracts rather than be guaranteed long-term employment with one organisation. Few people will pursue the same occupation throughout their working lives. Retraining will become a constant requirement to ensure that skills remain relevant. While the latest technologies will continue to be used in order to maintain a high standard of living, there will be pressures on industry and governments to retain some labour intensive forms of work in order to contain levels of unemployment. Three possible scenarios are presented for the future of work in the twenty-first century.