NEW LOW-COST ERA HEADING OUR WAY
If Amazon lives up to the hype, the prices we pay for products should get cheaper
As you may be aware, we are in the grip of a widespread wages correction. People are being asked to do more, or work better, for less. Workers in the private sector are accepting pay cuts, freezes or very low wage increases.
Understandably, people in this type of scenario are not overly thrilled. Australia is a terribly expensive place to live and the cost of living continues to rise, while people tighten their belts and try to manage as best they can.
Our period of wages stagnation is unavoidable and I expect it to continue. However, the impact can be somewhat offset if we can make the transition to a low-cost economy.
In a low-cost economy, we will all have easy access to cheaper goods and services. This will assist us all but particularly those on low incomes. For too long we have all paid far too much for things in this country. We have accepted high prices and also woeful levels of service. It is time that changed, and so thank goodness for the likes of Amazon.
You may be aware that the global online shopping giant has set up a distribution centre in Melbourne. It is yet to start trading here but overseas it is estimated that Amazon has dropped the cost of goods by 30 per cent.
The arrival of companies such as Amazon gives us our best chance of achieving change for the better. Amazon can help reduce the cost of living and assist the transition to a low-cost economy. Therefore we must do everything we can to welcome it and ensure its success.
For this reason, Russell Zimmerman’s recent comments are of interest and worthy of comment.
Zimmerman is the executive director of the Australian Retailers Association, and he was recently quoted in a Fairfax newspaper as pondering whether Amazon really understood warehousing and how it would go, “getting an in from the Transport Workers Union”.
This is basically saying that the TWU can decide whether to allow Amazon to participate in our market. Further, it indicates that if Amazon wants to be in our market, it will need to strike a deal with the TWU for permission to conduct a business.
When we have the head of an employer group publicly portraying our economy as this corrupt and attributing to a union the power to allow access to a market, in a blithe and accepting manner, it is a very poor reflection on our country.
Zimmerman’s comments are concerning too because someone from Amazon could believe them and run off to do a deal with the TWU, believing the company has no choice.
For the record, for the benefit of Amazon and the Australian community, the TWU does not have the power to control who participates in our market. It has no power to give Amazon an “in” and no power to exclude Amazon from the market.
By law, Amazon does not need and cannot be compelled to speak with any person from any union, ever, even if all its staff are in a union.
A union official has the legal right to speak to those Amazon staff eligible to join that union, in their lunchroom, in their nonworking time. A union official does not have the legal right to speak to anyone in Amazon management. The Amazon managers can completely ignore union phone calls, emails and other forms of contact.
Amazon does not need to engage in enterprise bargaining — indeed, it should avoid it like the plague. Australia has a system of modern awards and these are by far the cheapest and
For too long we have all paid far too much for things in this country. It is time that changed
most flexible way of employing people. Amazon can use the relevant awards as its baseline employment document, although it is free to pay individuals at its discretion above the base award rate if it wishes.
There is no need for Amazon to make any union deals or have “union relationships” with anyone. Amazon can avoid entering into commercial contracts with union-controlled companies — this will only place its supply chain at risk of inefficiency, delay and potential interruption.
Amazon can identify unioncontrolled companies quite easily: a Google search will reveal an industrial relations history. In real life, managers of union-controlled companies spend a lot of time complaining about the unions and shaking their heads about how powerful they are, before going off to have meetings or lunches with people from the unions.
When contacted this week, Zimmerman said he did not want to see any union control over industry leading to a dilution of the fantastic impact that Amazon could have on our economy. “Amazon is a disrupter,” he said. “They are coming and there is a great opportunity for retailers to engage with them and grow their business.”
Zimmerman is upbeat about Amazon. If it does what is expected, he says, we should be able to buy things more cheaply, have them delivered more quickly and for less. Let’s hope its doors are open by Christmas.