Australia faces worst labor and material shortages in 50 years

Days lost to industrial action have risen to their highest level in nearly a decade as wage pressure mounts on employers after years of weak wage growth.

Industrial actions, including strikes and lockouts, cost the economy 68,500 days in the last three months of 2021, the highest amount by far since 2012, according to data from the Australian Bureau of Statistics .

Teachers sing during a strike in December. Louise Kennerley

A decade-long strike by teachers at public schools in NSW in December made up the bulk of the days lost, but logistics and transport also saw significant disruption.

The rise in major social unrest comes as unions seek to relaunch work bans at Sydney Trains and health workers have warned of ‘a year of reckoning’ on wages.

Economist Warren Hogan, an adviser to Judo Bank, said the rise in the number of lost days was likely a sign of wage growth to come as workers sought to move from a “2-to-5 annual wage game”. 3%” over the past five years to 3-4% per year.

“There is definitely movement at the station,” he said.

″⁣Even if union membership is at an all-time low, union results regarding company negotiations or rewards will be a signal to the rest of the workforce.″⁣

While the number of disputes was still at relatively low levels, Mr. Hogan argued that the disputes could still set a benchmark for compensation because they involved a large workforce.

Disputes rose slightly in the December quarter, from 50 to 55, a two-year high, but involved a total of 57,200 employees, the highest since 2013.

The FedEx lockout of package delivery drivers in November was included in the data, along with the 24-hour strike by drivers in October to support 3% wage increases.

Tens of thousands of NSW public school teachers stopped work for 24 hours in December in protest against the state government’s 2.5 per cent salary cap, while train drivers also took part in months of work ban.

NSW accounted for three out of four days lost in the quarter, while education, healthcare and social care accounted for six out of 10.

Director of the Australia Institute’s Center for Future Work, Jim Stanford, said a strike by NSW nurses in February would likely see the relatively high level of days lost continue this year. “The wage caps imposed in many jurisdictions are certainly getting a backlash from workers, and we’re likely to see more of that,” he said.

″⁣The salary cap never made sense, but it is certainly not tolerable when inflation is heading towards 5 percent.″⁣

Dr Stanford said it was ‘reasonable to assume that workers are ready to fight stagnant wages, unsustainable working conditions and rising inflation’.

However, he warned that while the increase in industrial action was significant, it was still “modest from a historical perspective”⁣.

“The rebound in labor disputes is only bringing them back to the historically low rates that were seen in the 2010s,” he said. ″⁣ Unsurprisingly, labor disputes almost disappeared during the worst phases of the pandemic. The fact that they rebounded slightly with the reopening of the economy should not be interpreted as an outbreak of labor militancy.″⁣

Hogan pointed out that the industrial action was taking place in an environment ″⁣very conducive″⁣ to higher wages, given the severe labor shortage.

“I think we’re going to see a big increase in disputes just because the job market is so tight,” he said.

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