Strike Activity Under Enterprise Bargaining: Economics or Politics?

Australia has moved rapidly from a centralised Award based wage determination system to decentralised enterprise bargaining. This move has been associated with a substantial drop in strike activity. The relationship between working days lost and a series of macroeconomic variables is tested for the period 1985 to 2003, incorporating dummy variables for the different pieces of industrial legislation and four major periods of political strike activity in that period. The economic variables proved mostly insignificant with only the CPI and business inventories having any association with changes in strike activity. Working days lost fell significantly with the introduction of enterprise bargaining. Both the Reform Act 1993 and the Workplace Relations Act 1996 were associated with below trend strike activity. Overall, these results indicate that institutional factors now influence strike volumes, rather than economic.