Trade Union Activity and Post‐War Inflation In Australia

This paper reviews various models that may be used to analyze the inflation-unemployment problem in Australia. The focus is on the unemployment problem, rather than on inflation, and on the role of wages, itoininal und real, in affecting this problem. Models discussed include the Popular Keynesian, Phillips Curve, Fixed Coeflcient and Neoclassical Models. The possibility of increasing returns is considered. Australian evidence bearing on the appropriateness of ihese models is discussed. The effect of demand expansion on the exchange rate and hence real wages is stressed. Some emphasis is placed on the concept of 'union-voluntary' unemployment. At the end possible solutions to the unernployment problem are summarized.This paper reviews various models that may be used t o analyze the unemployment problem in Australia. The focus is on the role of wages, nominal and real, as well as of aggre-2 per cent during the post-war period until 1973.

Wages and Unemployment in Australia*

Corden

1979

Causal Relationships in Australian Wage Inflation and Minimum Award Rates*

Fels

Hoa

1981

When variables are correlated in time-series studies. it is often di#cult to determine which is cause and efect, and in what sense. This paper applies multivariate time-series tests of'causalitj to Austruliarr wage, price, minimum wage award. labour demand and strike (working days lost) variables for 1953-76. The results provide tentative support for a model in nhich strikes are exogenous: the size of Arbitration Commission a w a r h is determined by strikes (suggesting that a trade union capture theory OJ Arbitration Commission regulation may apply): money nages are determined by minimum wage awards; and the demand for labour variable (measured in this paper by the ratio of actual to potential output) is determined (in a negative relaiionship] by monej. wages.

An Empirical Analysis of Australian Strike Activity: Estimating the Industrial Relations Effect of the First Three Years of the Prices and Incomes Accord*

Beggs

Chapman

1987

Australian strike activity war relatively low in the 1983(2)‐1986(1) period. Some part of this experience is attributable to changes in the macroeconomic environment and some is a consequence of improvements in industrial relations. This paper attempts to determine the role of each by estimating econometric models for the 1959(3)‐1983(1) period and forecasting indicators of strike activity over the subsequent three years. We find that working days lost per unionist decreased because of macroeconomic conditions, but that these variables explain less than half of the actual decline. This suggests that, for the initial three‐year period of its institution, the Accord helped deliver a favorable industrial relations environment, a situation that is not necessarily long‐lasting. More generally, the results show strike activity to be pro‐cyclical and influenced by profits and inflation.