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Issue #1918      June 8, 2020

No wage freeze! No jobs lost!

It is a sign of things to come as the federal and state governments face mounting deficits and debts. The federal government has already frozen the wages of its employees. Employers are also on the front foot with demands for no increase to the minimum wage at the Fair work Commission’s (FWC) Annual Wage Review.

The Australian Industry Group (AiG) of employers trots out the usual capitalist myth that wage rises cost jobs in their submission. The cutting of penalty rates did not produce additional jobs as promised by employers and the government. But it did shrink the purchasing power and living standards of those who had their wages cut.

“Awarding a minimum wage increase in this year’s review would not be in anyone’s interests – certainly not in the interests of low-skilled workers who would be much more likely to lose their jobs, or in the interests of the hundreds of thousands of workers who have joined the dole queues. Over the months ahead, during the recovery from the pandemic, the priority needs to be on assisting businesses to retain as many employees as possible and encouraging businesses to take on employees,” Innes Willox, the AiG CEO said.

This move hardly constitutes a contribution to the consensus and cooperation between employers, government and trade unions that the government has proposed. It demonstrates clearly that employers will not abandon their class interests. They will never let up in their short-sighted drive to reduce wages and working conditions in the pursuit of maximum profits.

Wage freezes are contractionary

ACTU secretary Sally McManus responded to the AiG’s demands for a wage freeze: “Business has consistently opposed real wage increases for working people – now they are advocating a real terms pay cut,” she said.

“Undermining wage growth makes economic recovery harder and hurts our communities.”

The Fair Work Commission’s decision is due by the end of June and will directly affect around 2.2 million workers.

The government has put more money into workers’ pockets with cash payments, JobKeeper and the doubling of JobSeeker. It did so to stimulate the economy, to increase demand for goods and services.

Australia is sliding into a deep recession. Contractionary policies such as reducing wages will only deepen that economic crisis by reducing demand.

Jobs on the line

Members of the National Tertiary Education Union (NTEU) decided to hold a social distancing protest on 28th May to demand urgently needed support for universities. They have been hit hard with the loss of thousands of fee-paying international students as a result of the pandemic.

“The entire university community is in shock that the federal government has abandoned higher education during this crisis. It is hard not to see the federal government’s actions as wilful neglect. The JobKeeper rules have been deliberately adjusted three times to prevent universities from being eligible, despite the fact that 21,000 jobs nationally hang in the balance,” said Dr Melissa Slee, Victorian state secretary of the NTEU.

An agreement between the universities and the NTEU for a pay cut to save jobs fell through and the sackings have started.

Insulting

The NSW government is no longer applauding the heroic frontline workers who are risking their lives to save ours during the COVID-19 pandemic. Last week (3rd June) it attempted to pass a bill for a 12-month wage freeze for public sector workers. The bill failed to pass in the Upper House, but the government has not given up.

It now plans to use the Industrial Relations Commission – “the independent umpire” – to get what Parliament knocked back. It is threatening job losses if that fails.

The proposal for a wage freeze was met with widespread anger and condemnation from its employees and the public, so much so that Treasurer Dominic Perrottet followed up with an insulting $1,000, one-off payment. Not surprisingly it got the response it deserved.

The state employees had expected a 2.5 per cent pay increase as per their agreement with the government. Instead, the wages of public sector workers would be frozen for twelve months – in other words, a reduction in real wages. The government hoped to rip $3 billion out of their pockets.

The decision would have affected 400,000 workers including nurses, paramedics, teachers, early childhood educators, public servants, firefighters, state public transport workers, amongst others.

“Empty words”

The paramedics were quick to respond. They began refusing to bill patients on Monday 1st June. Members of the Nurses and Midwives Association (NSWNMA) began a series of rolling protests outside Parliament House the next day.

“For months we have put our health and our lives on the line in the COVID-19 pandemic, prior to that we worked through months of fires and then floods. Standing alongside our colleagues we have been at the frontline of all these crises,” the paramedics union said in a message to its members. “Despite this, all the NSW government has for us is empty words.

NSW Nurses and Midwives Association (NSWNMA) General Secretary, Brett Holmes, said members were frustrated by the hollow thankyous from Treasurer Dominic Perrottet and Premier Gladys Berejiklian.

More than sixty branches of the NSWNMA took action. In Sydney, they surrounded state Parliament, while practicing social distancing.

“Despite bullying attempts by the Treasurer, trying to buy-off nurses and midwives with a $1,000 payment, our members are steadfast against this callous public sector wage freeze,” Holmes said.

Unity vital

The government had originally indicated that frontline COVID-19 workers would be exempt from the wage reduction but later went quiet on its promise, and then went back on its word at the end of May.

By sending it to the Industrial Relations Commission, Berejiklian will attempt to distance the government from the decision. It is impossible to predict the Commission’s decision. But one possible outcome might be a freeze excluding frontline workers – possibly not handing down the full 2.5 per cent they should receive. It might even award the one-off $1,000 that was on the table alongside a freeze.

Other public sector workers face a freeze. Commissions always take into account the economy and jobs, in particular they adopt the capitalist myth that wage rises cost jobs.

Maximum unity between public sector employees is required with a united campaign against the wage freeze, not just in support of all frontline workers, but all public sector employees. It deserves the support of all trade unions, left and progressive political parties and the wider community. There should be no sackings, no reduced hours and no wage cuts.

Next article – Editorial – NO charges for Smethurst; others not so lucky

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