- The Guardian
- Issue #1963
Workers need a substantial wage rise now to meet day-to-day necessities. They need secure jobs. With secure employment, they can plan their lives and are more likely to spend. The economy requires workers to have money in their pockets to spend – this is what a rational stimulus plan would look like.
But Australia has a government that does not understand or refuses to accept these simple facts. If workers do not have the money to spend, no matter how much more the private sector produces, there will be no one to buy it.
In his budget speech, Treasurer Josh Frydenberg described Australia’s recovery from the 2020 economic recession as truly “remarkable.” “Australia’s economic engine is roaring back to life,” he said, painting a rosy picture of an economic recovery outshining other similar economies.
It is true, JobKeeper kept workers on the books of their employers, kept employers afloat and put money in workers’ pockets. The JobSeeker supplement enabled the unemployed to buy the necessities of life and saved many from homelessness.
Now, during such a “remarkable” economic recovery, surely it is time for workers to share in the recovery with a wage rise. After all, corporate profits rose an average of fifteen per cent last year. But no, when the government appeared before the Fair Work Commission’s annual review of the minimum wage, the gloss lifted. Apparently, the economic situation is not so good. The time is not right for a real wage rise!
“The ability of employers to respond to wage increases during a downturn would likely be compromised exacerbating negative employment impacts.” A “downturn”? That doesn’t sound like an “economic engine [which] is roaring back to life.”
The government was sticking to its budget forecast of no real wage increase before 2024, only supporting a token increase. The employers, as per usual, lined up with their arguments against a real wage rise. They trotted out the usual employer myths that wage rises destroy jobs and cause unemployment.
Workers have been subjected to stagnant or declining wages for several decades. For the 2.2 million workers who are reliant on awards, the minimum full-time wage is $753.80 per week. Whereas the average full-time adult ordinary hours wage for workers is $1,711.60. In other words, the rate of pay for the 2.2 million lowest-paid workers is forty-four per cent of the average wage!
For the unemployed, there is no relief in sight – just an insulting and punitive $50 per fortnight ($3.57 per day) increase in the permanent rate of the dole. That brings their income up to $310.40 a week or $44.34 a day. Department of Social Services figures indicate that 1.24 million people were on JobSeeker in January, and another 135,540 received the youth allowance, which is even lower.
ACTU MINIMUM WAGE CLAIM
The Australian Council of Trade Unions (ACTU) called for a modest 3.5 per cent ($26.38 weekly) increase in the minimum wage which would directly benefit the 2.2 million workers on the minimum wage.
ACTU Secretary Sally McManus said a sizeable increase was essential to Australia’s economic activity. “If wages don’t increase it threatens the entire recovery. Money in the hands of working people is what will create sustainable economic growth, not bigger profits for big business,” McManus said.
Instead of supporting a real wage rise for workers, the government is pouring money by the bucketloads into the private sector – $320 billion in “investment incentives” announced in the last year’s budget and this one. The government claims it will create an estimated 60,000 jobs by 2022-23. The real aim is to boost profits for its business mates and political donors.
Denying workers a living wage makes no economic sense, even from a capitalist perspective. There is already excess capacity in the economy. Expanding businesses will only increase this excess when workers lack the cash to buy what is produced.
The government should be supporting a real wage rise that will both stimulate the economy and improve the living standards of workers and their families.
Even the conservative Reserve Bank of Australia supports a wage rise of at least three per cent.
GENDER GAP REMAINS
Average weekly earnings (full- and part-time) for females in November 2020 were $1,050.60 compared with $1,526.60 for males (ABS, February 2021). That is a whopping gender gap of $476.00 per week. Or, to put it as a percentage, women are paid on average sixty-eight per cent of what men receive.
The pandemic affected women disproportionately, making up a large proportion of those made unemployed or leaving the labour force. This was in part due to types of businesses that were forced to shut during lockdowns where the workforce was predominantly female. They were also much more likely to have family responsibilities as a parent or carer.
The introduction of free early childhood education and care was of tremendous benefit, enabling many women to return to paid work. It should be on a permanent basis. This would be an important step towards economic independence for many women and be of benefit to the development of children.
It is perhaps premature to assess the impact of the end JobKeeper on 28th March. The labour force figures released by the ABS earlier in the month are based on a survey carried out between 4th April and 17th April. As JobKeeper was paid to employers retrospectively, many recipients were able to pay their employees during that survey period.
The official unemployment figure fell from 5.7 per cent to 5.5 per cent in April. But this statistic does not tell the whole story. The number of monthly hours worked fell by 13 million. That’s the equivalent of 342,000 full-time jobs. The number of employed workers fell by 30,600.
The economy gained 33,800 full-time jobs and lost 64,400.
The fall in the unemployment rate is largely a consequence of workers withdrawing from the workforce – unemployed and given up looking for work. The percentage of working-age people who have a job fell, and the rate of casual employment remains high.
Retail trade, accommodation, and food services account for a large proportion of all casual workers across Australia. Large numbers of casual workers are also employed in construction, health, education, road transport, and other service industries.
According to the government’s labour market website, there are 243,500 job vacancies. That falls far short of the more than 1.2 million unemployed seeking work, the many more underemployed, and the thousands of workers who dropped out of the labour force last month.
Employers report receiving 100 or more applications for a job. In other instances, they claim there is a shortage of skilled labour. Prior to the pandemic, they relied heavily on vulnerable visa workers who they exploited to the hilt, paying below award wages.
Skills shortages arise out of the lack of planning on the part of the government, the hefty TAFE and university fees, and inadequate student allowances. For women, it is even more difficult to study if they have family responsibilities and cannot afford childcare.
Capitalist economists use the term “full employment” to mean the percentage of unemployed at which the economy is “balanced.” Whereas a few years ago they spoke in terms of five percent, today four per cent or less is raised as a target.
This is the level that they believe will stimulate demand for a stable recovery – an oxymoron under capitalism.
Full employment should mean full employment!
The government talks endlessly of the uncertain economic situation. It has no plans in place. True to its neoliberal form, it is pouring hundreds of billions into the private sector, squeezing wages and relying on “market forces.”
There are things it could be doing to make Australia more secure and prosperous:
- Plan the economy, putting people’s needs ahead of private profits
- Support a living wage
- Raise the rate of JobSeeker, Youth Allowance, and other social security payments
- Restore stolen penalty rates
- Provide free early childhood education and care
- Abolish TAFE and university fees
- Organise vaccination distribution efficiently
- Build dedicated quarantine facilities in each state and territory within easy reach of a hospital
- A just transition to renewable energy
- Redirect the billions spent on war preparations to social spending