Quarter of billion year stripped from Hunter communities by wage-cutting: new analysis

Mining & Energy Union

Analysis of coal mining electorates has found that over a quarter of a billion dollars a year is lost from local economic activity in the Hunter region due to aggressive wage cutting-strategies by mining companies. A new McKell Institute report released today analyses the impact on local economic activity of mining companies’ widespread replacement of permanent mining jobs with lower-paid labour hire workers.

It found that in the electorates of Hunter and Paterson, which have the highest proportion of coal employment in NSW, up $235.85 million per year is taken out of the local economy.

The report contains a detailed analysis of how the labour hire employment model has systemically been used to reduce wages that would otherwise have circulated through local mining regions. Across the five electorates with the highest proportion of coal mining activity nationally, there is nearly a billion dollars a year in lost economic activity. “Outsourcing jobs to labour hire companies is a way for mining companies to get around Enterprise Agreements that have been negotiated by workers over decades,” said Mining and Energy Union Northern Mining and NSW Energy District President Robin Williams.

“By using this wage-cutting strategy, some of our wealthiest corporations have been able to strip up to 40 per cent from the wages of Hunter Valley coal miners and remove conditions like redundancy entitlements.

“In our local towns like Singleton, Cessnock and Muswellbrook, well-paid mining jobs have traditionally formed the backbone of local economic activity.

“Secure jobs have been an important part of the social compact between mining companies and host communities. But this report shows how mining companies have washed their hands of this responsibility and communities are being ripped off.”

One Hunter Valley labour hire coal miner said she joined the industry over five years ago hoping to learn new skills and progress her career.

“Due to the industry employment practices in the Hunter Valley, this is no longer something that I consider a possibility going forward. I do not see the prospect of moving into a permanent role in the near future, and I now have to consider my options for the security of my family,” said the mineworker, who did not want to use her name for fear of losing her job.

“You can spend years at a site working the same job, on the same roster only to earn up to $60,000 less annually than a permanent mineworker.

“It is degrading and demoralising to have no choice but to be put in this position just to get a start in the industry with a very minimal chance of gaining a permanent shirt for years to come.”

Mr Williams said the Mining and Energy Union would continue to campaign for ‘Same Job Same Pay’ laws in the upcoming federal election, so labour hire could be used to address genuine temporary or specialist labour needs but not to undercut wages and conditions in existing Enterprise Agreements.

Read the report.

/Public Release.