A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Hancock, Keith J. Book — Published Version Australian Wage Policy: Infancy and Adolescence Provided in Cooperation with: University of Adelaide Press Suggested Citation: Hancock, Keith J. (2013) : Australian Wage Policy: Infancy and Adolescence, ISBN 978-1-922064-46-2, University of Adelaide Press, Adelaide, http://dx.doi.org/10.20851/wage-policy This Version is available at: http://hdl.handle.net/10419/182251 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/3.0/ www.econstor.eu Welcome to the electronic edition of Australian Wage Policy: Infancy and Adolescence. The book opens with the bookmark panel and you will see the contents page. Click on this anytime to return to the contents. You can also add your own bookmarks. Each chapter heading in the contents table is clickable and will take you direct to the chapter. Return using the contents link in the bookmarks. The whole document is fully searchable. Enjoy. KEITH HANCOCK A graduate of the University of Melbourne, Keith Hancock took his doctorate at the London School of Economics in 1959. He was then a Lecturer in Economics at the University of Adelaide before becoming the Foundation Professor of Economics at Flinders University in 1964. In 1980, he became Vice-Chancellor of Flinders University. He left Flinders University in 1987 to become a Presidential Member of the Australian Conciliation and Arbitration Commission (later the Australian Industrial Relations Commission). Since his retirement in 1997, Hancock has held honorary appointments at Adelaide and Flinders Universities. He was one of the founders of the Industrial Relations Society of South Australia. He also founded the Flinders University (later the National) Institute of Labour Studies. Hancock is a Fellow and former President of the Academy of the Social Sciences in Australia. He has served as President of the Industrial Relations Society of Australia and the Economic Society of Australia (South Australian Branch). This book is available as a free fully-searchable pdf from www.adelaide.edu.au/press Australian Wage Policy INFANCY AND ADOLESCENCE by Keith Hancock School of Economics The University of Adelaide Published in Adelaide by University of Adelaide Press The University of Adelaide Level 1, 230 North Terrace South Australia 5005 [email protected] www.adelaide.edu.au/press The University of Adelaide Press publishes externally refereed scholarly books by staff of the University of Adelaide. It aims to maximise the accessibility to its best research by publishing works through the internet as free downloads and as high quality printed volumes on demand. Electronic Index: This book is available from the website as a downloadable PDF with fully searchable text. © 2013 Keith Hancock This book is copyright. Apart from any fair dealing for the purposes of private study, research, criticism or review as permitted under the Copyright Act 1968 (Cth), no part may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior written permission. Address all inquiries to the Director at the above address. For the full Cataloguing-in-Publication data please contact the National Library of Australia: [email protected] ISBN (paperback) 978-1-922064-47-9 ISBN (ebook) 978-1-922064-46-2 Cover design: Emma Spoehr Book design: Zoë Stokes Paperback printed by Griffin Press, South Australia To Joe Isaac—Teacher, scholar, critic, and lifelong friend CONTENTS Foreword vii 1 Inception and setting 1 The Higgins era 1907–1921 2 The setting 43 3 The basic wage 1907–1921 55 4 Broadening the scope of wage policy 151 Caution and restraint 1921–1929 5 The setting 187 6 The Powers era 217 7 The new regime 279 Wage policy in Depression and recovery 1929–1939 8 The setting 331 9 Wage policy and the onset of Depression 359 10 The depths of the Depression 465 11 The basic wage in the recovery 543 12 Other aspects of wage policy 1935–1939 595 The economic critique 13 The economics of wage regulation 653 References 711 Index 723 FOREWORD The system of industrial conciliation and arbitration was, for most of the 20th century, a distinctive feature of the Australian economy and society. It was hailed by some as a source of equity and a mechanism of economic management; by others, it was condemned as a market friction and a brake on economic progress. In the 1990s, the system was relegated to a diminished role, partly because of a shift of opinion toward the latter perception and partly because the trade union movement, frustrated by restraints on the exercise of its power, withdrew its support for the traditional system. Though no one can foresee with certainty future industrial relations arrangements, the revival of a system of centralised regulation seems improbable. Australian society is, nevertheless, a product of its history, and is better understood if we do not lose sight of that history. This study describes a small part of it. It is confined to the period between the inception of conciliation and arbitration and World War II. If, as I believe, the history of the system is worth telling, the study needs to be carried forward for the remainder of the 20th century. I hope that there are scholars who will take on that task. In addition to the time limitation, there is one of scope. My focus is the regulation of the terms of employment, the attitudes and goals underlying it, the economic settings in which it occurred and the economic consequences. Except when they bear directly on my central inquiry, I do not deal with industrial disputes, or with constitutional and other legal issues that surrounded the operation of the arbitration system, or with the politics of arbitration. There is some literature in these areas, but the book is not closed. In this book, there are many citations of cases published in the Commonwealth Arbitration Reports (CAR). I have elected not to refer to these viii Australian Wage Policy cases in the conventional legal manner (Amalgamated Engineering Union v Alderdice) but to use titles which give some indication of the contents of the decision (Main Hours case). It was the practice of the Judges, in their decisions, to refer to previous cases in this way. In some cases, the reports themselves use descriptive titles (Basic Wage and Wage Reduction Inquiry) and I have adopted these. I have also used short titles which appeared in later numbers of the CAR (Judgment—Saddlery Industry (Tanning Section)). I am grateful, for the photographs, to the Australian Bureau of Statistics, Fairfax Media Limited, Fair Work Australia (now the Fair Work Commission), the National Library of Australia, the State Library of South Australia and the State Library of Victoria. I should like to thank Rachel Franklin, at the relevant time Librarian of the Australian Industrial Relations Commission and Fair Work Australia, for helping to assemble primary materials for my study; Tom Sheridan for making available his copy of the Harvester case transcript; the University of Adelaide and Flinders University for conferring honorary appointments on me and providing access to facilities for my work; the Directors of the National Institute of Labour Studies for their encouragement and support; the South Australian Industrial Court and Commission for accommodating me in their library while I worked on limited-circulation documents; Joe Isaac and Stuart Macintyre for reading my manuscript and making many helpful suggestions; Sheila Cameron, my proficient and helpful copyeditor; and the University of Adelaide Press—especially John Emerson and Zoë Stokes—for publishing this book. My wife, Sue Richardson, and my four children—Jim, Kate, Bill and Ben—have given me every encouragement and shown much forbearance as I have worked on the project. Keith Hancock March 2013 1 Inception and setting The advent of industrial regulation by tribunal came close to the turn of the century. Wages boards began in Victoria in 1896 and courts of arbitration in 1900. The first day of the new century was also the first day of the Commonwealth of Australia, endowed with a parliament that was empowered to institute its chosen models of conciliation and arbitration for the prevention and settlement of interstate industrial disputes. This book is a study of the operation of conciliation and arbitration, especially by the Commonwealth Court of Conciliation and Arbitration, from the inception of the system until World War II. It is not, however, a general history of conciliation and arbitration. It does not, for example, deal with the successes and failures of the tribunals in preventing strikes and lockouts; or with the manifold legal issues to which the system gave rise, unless they affected significantly the tribunals’ exercise of their power to fix wages and conditions.1 Rather, it is about fixing the terms of employment; and it attempts to set the tribunals’ performance in an economic context.