Webdiary - Founded and Inspired by Margo Kingston

by Jack H Smit
Project SafeCom

Ian Harper, John Howard's new Fair Pay Commissioner, is an Anglican who's on God's side, and he's been pretty open about it since his appointment. It seemed a bit up in the air at the time, but Australian reporters let him have his day in Heaven when he was first appointed. Now, it seems, Mr Harper may know more about God than about the Australian history of Industrial arbitration, a discovery probably first made through Sydney-based blogger Evan Jones - on his Alert and Alarmed Blog - and further brought to the public domain by the folks of ABC Radio's PM program this week.

Because Harper is not a Catholic like the Pope, he may be forgiven for not having heard of Leo the 13th, or for not having read this Pope's 1891 Rerum Novarum. From an online explanation of the Pontiff's wise words:

Rerum Novarum is an encyclical issued by Roman Catholic Pope Leo XIII on May 15, 1891. It was an open letter to all the bishops that addressed the condition of the working classes. Leo supported the rights of labor to form unions, but rejected socialism and affirmed private property rights. He discussed the relationships between government, business, labor, and the church proposing a social and economic structure that was later called corporatist.

The Pontiff's New Case was used by Australia's Arbitration Commissioner Henry Bournes Higgins. In 1907 Higgins stated that the minimum wage for Australians "must be enough to support the wage earner in reasonable and frugal comfort".

The Harvester Judgement, as the case before Higgins is known, established the Australian Federal and later also State notion of a 'fair and reasonable wage'. The Harvester Judgement was a central moment in the history of Australia and it created one of the central planks in our way of life. So important was the Harvester Judgement that I had to learn about it in my first year as a social work student in Western Australia.

Commissioner Higgins noted during the case:

I regard the applicant's undertaking as a marvel of enterprise, energy and pluck ... he is allowed - if my view of the Act is correct - to make any profits that he can and they are not subject to investigation. But when he chooses, in the course of his economies, to economise at the expense of human life, when his economy involves the withholding from his employees of reasonable remuneration, or reasonable conditions of human existence, then, as I understand the Act, Parliament insists on the payment of the Excise duty.

But, credit where credit is due: God and Howard's Fair Pay man Ian Harper has also heard of the Harvester Judgement. In 2002 he writes in Policy, the magazine of the Centre for Independent Studies about this case against Hugh Victor McKay of the Sunshine Harvester Company:

Higgins' judgment is famous because it established a precedent for calculating the 'basic wage', defined as sufficient to meet 'the normal needs of the average employee regarded as a human being living in a civilised community'. Justice Higgins arrived at the figure of seven shillings per day by setting down the weekly expenses that he judged necessary to keep a family of two adults and three children living in what he considered to be a civilised condition. Significantly, the decision was made without reference to the employer's ability to pay - in other words, without reference to the underlying productivity of the labour being paid the basic wage.

But then, in his next paragraph, Harper starts distorting the facts to suit his argument:

Far from obtaining relief from excise duties, McKay faced an increase in his wages bill estimated at 25%. The Sunshine Harvester, the pride and joy of the company and a strong contender in export markets for agricultural equipment, never realised its potential. The company eventually ceased manufacturing in Australia and entered an agreement with the Canadian multi-national, Massey-Ferguson-Harris, to distribute Canadian-built harvesters in Australia. In 1955, the company sold out to the Canadians and became Massey-Ferguson (Australia). But for the Harvester Judgment, Massey-Ferguson might now be known as the McKay Harvester Company. Australia> may have lost more than a homegrown harvester - we may have passed up the chance of owning a multinational agricultural equipment manufacturer!

As the folks on the Alert and Alarmed Blog note:

"… he makes the remarkable claim that Higgins' Harvester judgement imposed such an increase in wage costs on McKay Harvester that it fatally damaged its prospects as a successful Australian manufacturer, eventually leading to its takeover by Canadian Massey Ferguson in the 1950s."

"In fact, McKay never had to pay the wage Higgins set. It appealed to the High Court, which overturned Higgins' decision on the basis that the Excise Tarriff Act was unconstitutional. The following year, drought led to hard times for the agricultural implement industry, and over half of the workers at Sunshine were laid off. The agricultural implement union, bankrupted by its ongoing battles with McKay, didn't get to the Arbitration Court again until 1925."

Sorry, Mr Harper - it just didn't stick. Drawing suitable conclusions contradicted by historical facts is a dangerous game. You made it clear that you were unhappy with the "significant" aspect of the Harvester judgement: "the decision was made without reference to the employer's ability to pay - in other words, without reference to the underlying productivity of the labour being paid the basic wage", but that's the way God decided it to be for Australia. You know, God - in this case and in the case of Leo the 13^th, the God of the humblest of workers - was there before you came along.

Harper does not leave it there. As the folks of PM summarise:

PM has unearthed a paper by Professor Harper, which condemns the concept, established in the famous Harvester Judgement of 1907, of a "fair and reasonable" wage.

The Fair Pay Commission's boss also expresses approval for wage rates paid in the sweatshops of lower Manhattan some time ago. And he argues that low-skilled workers should be paid rates commensurate with their low productivity.

From Harper's next paragraph:

Other countries, notably the United States, also faced the dilemma of developing beyond a highly productive primary sector. In the US case, they were also keen to grow their population through immigration, although not for defence reasons. The key difference between such cases and our own is that other countries did not try to divorce wages from the low levels of productivity characteristic of high-employment manufacturing industry. Employers in the sweatshops of lower Manhattan were not obliged to raise wages to 'fair and reasonable' levels. While this is no doubt partly responsible for the wider dispersion of wages in countries like the United States compared with Australia, growth of manufacturing industry in the United States did not require the systematic intervention from government which became the hallmark of attempts to nurture manufacturing in Australia.

Thanks, Mr Harper, for telling us where you stand. Now we know why you were chosen by Australia's Prime Minister John Howard. You share the same God with Howard - the God of the Anglicans - and you also have the same Golden Calf hypnotising you in your living room - the Golden Calf of Big Business and The Economy. High productivity, this Golden Calf's sweet milk, precedes and if need be, precludes universal human rights for workers. You were appointed because Howard seeks to undo all that was achieved in Australia since Industrial Arbitration.