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Issue #1597      June 12, 2013

Editorial

Crumbs for the low paid

Low paid workers have been sold short yet again. Last week’s so-called Fair Work Australia Minimum Wage Panel’s decision handed the lowest paid workers a miserly rise of 41 cents per hour or an extra $15.80 per week for a 38-hour working week. The minimum wage will be $16.37 per hour for adults and the weekly rate will rise by to $622.20. While a few crumbs are better than nothing, the decision is a slap in the face for the 1.5 million low paid workers whose wages are based on the decision. The $15.80 falls far short of recent increases in energy, water, transport, health, education and housing costs.

The ACTU had sought a very modest flat increase of $30 per week for the lowest paid but the Panel listened to the employers and government, granting a 2.6 percent wage rise. “We are stunned that today the Commission has acknowledged that wage inequality is rising in Australia but it has done absolutely nothing about it. In fact, after this decision, it will only get worse,” ACTU secretary Dave Oliver said. The percentage increase means those on higher incomes receive larger increases which widens the gap. Those most affected include unemployed workers and single parents being thrown off benefits, shop assistants, cleaners, hospitality workers, call centre staff, outworkers, process workers, apprentices, women, migrants and youth.

The employers called on the government to increase transfer payments (tax cuts and rebates and social security) for the low paid. (They sing a different tune at budget time, urging governments to cut payments and reduce expenditure so they can profit from tax cuts.) These payments are in effect an indirect subsidy to employers who pay poverty level wages to maximise profits.

“We acknowledge that both the relative living standards and the needs of those on lower award rates are assisted substantially by the tax-transfer system, but despite this assistance there is evidence of poverty and a rise in levels of financial stress among some low-paid families,” the Panel correctly points out. It then makes the incredible claim “that increases in minimum wages are a blunt instrument for addressing the needs of the low paid.” They are nothing of the sort. A decent wage rise could lift hundreds of thousands out of poverty – what the employers are covering up is that it would mean a cut in their profits.

Needless to say the Panel takes up the employer call, and suggests that the “tax-transfer system can provide more targeted assistance to low-income households and is a more efficient means of addressing poverty.” In other words, employers can be let off the hook to exploit their workforces to the hilt with no responsibility to pay workers a living wage, let along the full value of their labour. Taxpayers on the other hand – mainly workers on higher wages – can foot the bill to supplement higher rates of profit and starvation wages. This amounts to an indirect government subsidy to the private, for-profit sector. Talk about corporate welfare!

Workers were again cheated over productivity. The Panel’s 2012 decision noted an increase in labour productivity during 2011-12 but failed to pass it on. The 2013 review notes an increase of 2.9 percent in labour productivity as measured by GDP per hour worked. “… the gross value added in the market sector per hour worked increased by 2.4 per cent … ” In other words there was a marked increase in the rate of exploitation but this will not be shared with the exploited underpaid workers. “If sustained, the recent improvement in labour productivity could provide the capacity to address the declining relative position of the low paid and for them to share in increasing community living standards.” Don’t hold your breath!

The Panel’s decision further reduces low wages relative to average earnings and in doing so exerts downward pressures on the wages of other workers. It also has an impact on social security payments as the government attempts to widen the gap between the dole and minimum wage. Until such time as the trade union movement mounts a united, militant struggle including higher paid workers for a substantial increase in the minimum wage, the Panel and employers will continue to get away with offering the lowest paid a few crumbs once a year. Relying on sophisticated economic debates in a capitalist tribunal will never deliver workers the wages they deserve and need to live in dignity and provide for their families. The minimum wage campaign can only be won through action in the workplace and broader community.

Next article – Statement on position of National Organiser

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