Wages and Unemployment


Walduck's woorkroom staff at Beaconsfield, 1900 (AOT, PH30/1/5938)

In its formative years, Van Diemen's Land was a prison farm dependant on a publicly owned slave labour force, at once cheap and inefficient. Despite its inefficiency this convict workforce developed the infrastructure required for the transformation of the island colony in the 1820s from a prison farm to a vibrant predominantly free market colonial economy. By 1830 the workforce was evenly balanced between convict and free labour, while the growth of Van Diemen's Land based on intercolonial wheat sales and exports of fine Merino wool pushed the average wage to levels comparable with New South Wales.

Van Diemen's Land's odd mix of soldiers, convicts, paupers, mechanics and capitalists was swelled in the early 1830s by large-scale migration (4000 in 1833 alone). This put downward pressure on wages, making immigrants unpopular with local artisans. The early 1830s were marked by a nasty debate about the immiserising effects of migrants on local workers. The pressure shifted to convicts and transportation during the 1843 Depression for similar reasons: an oversupplied labour market and high unemployment. These debates about immigration and transportation were heightened by a labour assignment system favouring the convicts. Free settlers and immigrants wanted to see the system abolished, opening up opportunities for employment for non-convict workers.

A relative wage differential between Tasmanian and Victorian labour markets emerged in the wake of the Victorian gold rush. The promise of higher income and improved job security in Victoria enticed many Tasmanian residents to settle there. The net immigration gains of the 1830s were reversed in the 1850s. Transportation was extinguished in 1853, putting to an end these friction-filled characteristics of the labour market. Economic depression in the first half of the 1860s generated a 25 percent drop in Tasmania's average wage income. The aftermath was characterised by the proliferation of specific trade associations, the first manifestation of organised labour on a large scale. The Tasmanian labour movement has always been viewed as benign in terms of its approach and certainly the trade union movement's initial stirrings were benevolent.

It was not until 1883 that a Trades Hall Council was established from the membership of the variegated trade associations around Hobart, and the development of some militancy among some unionists had to await the development of Tasmania's west coast mines and communities. The Amalgamated Miners Association, also formed in 1883, took a more militant stance in dealing with mine owners. A further turning-point in Tasmania's union history occurred in 1889 on the occasion of the Sixth Intercolonial Trade Union Congress. Many unions were formed or reformed during this event and Tasmania's modern union movement was born. These employment unions had little chance to be proactive ahead of the Depression of the 1890s which set off a dismal period for Tasmanian workers. Some of the fledgling unions collapsed along with wage incomes in general, and unemployment became chronic until the nexus between low wages and high unemployment was broken by the discovery and exportation of minerals in the late 1890s. Federation brought with it a need to redefine the wage-fixing arrangements at commonwealth and state levels. The delayed catalyst for wage-fixing reforms in Tasmania was a series of strikes over pay, which led to the establishment of a Wages Board in 1909. The Tasmanian Labor Party was formed in 1903. A pattern of wage inequity emerged in the wake of the celebrated Harvester Judgement (1907) establishing the notion of a basic living standard wage. Clearly different definitions applied across different Australian states and territories and those on Tasmanian state awards were paid less, a situation which prevailed from the 1920s to the Second World War.

The Great Depression of 193136 hit Tasmania hard: 33 percent of the workforce were unemployed in 1931. Public sector wages were cut by 20 percent and the impact on social wellbeing was severe. Although unemployment, wages and conditions improved somewhat, a generally depressed state of the labour market prevailed until the outbreak of the Second World War. Ration books and not prices became the dominant influence on income distribution. The post-war period was marked by a boom of South Sea bubble proportions. Tasmania's total average weekly earnings rose by 26 percent in 1950 and inflation by 20 percent. This record inflation was fuelled by a sharp increase in the demand for wool as the western democracies geared up for the Korean War. The decades which followed were marked by the centralisation of the industrial relations system and the flow-on of wage and other benefits from commonwealth to state awards. This, in association with procedures applied by the Commonwealth Grants Commission in distributing the commonwealth's income tax, helped preserve the equality of Tasmanian and interstate incomes. However, it was always the case that Tasmania's average income was and remains below national levels. These wage differences widened during the Labour Accords of the 1980s and as a result of the labour market reforms of the coalition government dating from 1996 to the present time.

Bruce Felmingham