The Guardian 19 March, 2008
Minimum wage:
"Time for an increase is now"
Bob Briton
As the myth of the "sound" Australian economy continues to unravel, the ACTU has stepped in to claw back some of the financial losses suffered in recent times by the country’s lowest paid workers. These workers have been hit hardest by rising rents and mortgage repayments and spiralling fuel and food prices. While executive pay has risen on average by 30 per cent in the last 12 months, the ACTU calculates that workers on minimum wages have lost $43.67 per week from the real value of their wages — or more than $2,200 a year — over the past three years.
ACTU Secretary Jeff Lawrence used a recent address to the National Press Club to announce a claim for an increase of $26 per week in the minimum wage. This would take weekly pay from $522.12 to $548.12. The tradesperson increase being sought is 4.2 percent — the equivalent of the current rate of increase in the Wage Price Index. The ACTU is using a recent study by the Australian Bureau of Statistics which shows that the effective rate of inflation for households is 1 percent higher than the headline Consumer Price Index.
The claim will go to the WorkChoices-generated body called the Fair Pay Commission headed by Professor Ian Harper. Jeff Lawrence noted Professor Harper’s comments that minimum wage workers should be prepared to take a cut in the real value of their wages this year and bear the brunt of the economic downturn. The Commission head doesn’t appear inclined to take a financial bullet himself. He had a rise of $38,000 a year (or 47 per cent) last year. And while Prime Minister Rudd has made public calls for restraint at top end of the income earning scale, there is no evidence that they are being heeded. There is no talk of enforcing restraint on Australia’s high flyers, either.
It’s a different story for the 10 percent of workers on the minimum wage. Business groups are pushing for only half of the ACTU figure to be handed down. Opposition Treasury spokesman Malcolm Turnbull has been goading the government into announcing what figure it is recommending to the commission. The Libs have developed the habit recently of publicly speculating as to the intentions of the government, then trying to force them to confirm or deny the speculation.
"Everyone in Canberra knows that Treasury made a recommendation — it was $18 a week," the former merchant banker Turnbull taunted in Parliament last week. "It was lower than the ACTU’s recommendation, although higher than the business groups recommended … Kevin Rudd doesn’t have the compassion, he doesn’t have the courage, he doesn’t have the integrity to make any recommendation to the Fair Pay Commission."
Deputy Prime Minister Julia Gillard defended the government’s non-committal stance on ABC Radio program AM last week: "We are making the point that, of course, things are moving in our economy and moving in the international economy and we will take the opportunity after the May budget to further update the Fair Pay Commission on macroeconomic conditions."
Minister for Small Business Craig Emerson echoed the economic anxieties of the Deputy PM on the ABC’s Lateline program. "We’re actually accepting the advice of Treasury, who said it would be hazardous to put a dollar amount on it," he said. "The reason they say that and we agree is that there’s a balance to be sought here. We understand the cost of living pressures under which families find themselves, but at the same time we need to get on top of the inflation problem that we have here."
The government is not about to challenge the bosses’ line that wages determine the rate of inflation. Profits are never suspected. Executive pay will continue its giddying climb. The military will keep on burning money. But Australia’s shop assistants, cleaners, factory, call centre, child and aged-care workers will have a lid put on their meagre wages. That is the line the bosses and their representatives stick to.
"In a prosperous country like Australia there can be no justification for reducing the living standards of the most vulnerable … I will always fight to maintain decent wages and comprehensive protections for those workers with less bargaining power. I believe that the time for a decent rise in the minimum wage is now," Jeff Lawrence told the National Press Club.