- by Anna Pha
- The Guardian
- Issue #2056
The Fair Work Commission’s (FWC) decision to award a 5.75 per cent wage rise for those on minimum award wage rates was higher than expected by many. However, it still sold workers short in the face of decades of stagnating and falling wages. It also failed to match an inflation rate of around 7 per cent.
This national minimum wage decision should be seen as a start in the struggle to restore real wages and win real wage rises for workers and a living income for social security recipients.
As the FWC stated in its decision: “We acknowledge that this increase will not maintain the real value of modern award minimum wages nor reverse the reduction in real value which has occurred over recent years.”
The national minimum wage for workers not covered by an award or agreement will be increased by 8.65 per cent. Consequently 184,000 lowest paid workers stand to get an extra $70.20 a week, with their hourly wage rising from $21.38 per hour to $23.23 or from $812.60 to $882.80 per week.
The increase will be effective from 1st July 2023. There will also be a flow-on effect to some state awards and enterprise agreements.
ACTU Secretary Sally McManus said it was a critical increase during this cost-of-living crisis. The ACTU had campaigned for a 7 per cent increase. McManus pointed out that big business had pushed hard for a cut that would see Australia’s lowest paid workers go backwards by at least $1,350 a year.
The decision applies directly to the just over 20 per cent of Australian workers who are paid in accordance with minimum wage rates in modern awards.
The FWC noted that these workers “… are significantly different to the workforce as a whole.”
“They mostly work part-time hours, are predominantly female, and almost half are casual employees. They are also much more likely to be low paid.” The FWC said it would be looking to do a review into wage gender inequity, hopefully in time for next year’s minimum wage case.
Amendments to the Fair Work Act made by Labor in 2022 require the FWC to give greater emphasis to the issues of gender equality and job security.
“We have also taken into account the recent robustness of the labour market, and the fact that increases to modern award minimum wage rates will provide a disproportionate benefit to female workers and thus may contribute to reducing the aggregate gender pay gap across the workforce,” the FWC said.
“The Commission will soon commence a research project to identify occupations and industries in which there is potential gender pay inequity and gender undervaluation of work and qualifications, and once completed this will underpin the consideration and determination of the identified issues,” the FWC said.
“With last year’s [wage] increase of 5 per cent and inflation at 6.8 per cent, we clearly do not have a wage-price spiral. Increases to the minimum wage over the past 20 years have had no discernible impact on inflation in the following year, recent research from the Australia Institute reveals. It is time to put the outdated wage-price spiral myth to bed,” McManus said.
As usual businesses are bleating that the decision will cause them to go bust as they post record profits.
The wage decision should be seen as a start; the FWC itself states it does not maintain or restore real wages. Prices continue to spiral. Charities continue to be overwhelmed with increasing numbers of people seeking assistance as the cost of living crisis continues to intensify.
One has to wonder what planet the Reserve Bank of Australia is on increasing interest rates yet again by 0.25 per cent. Is it trying to drive the economy into recession? The impact on people with home loans and renters as it is passed on by landlords will be horrendous.
This will leave households with even less to spend on necessities, and result in increased housing stress and pressure on charities which already cannot meet demand.
An annual housing snapshot released by Anglicare in April found that less than 1 per cent of listings were affordable for renters earning the minimum wage. Governments at all levels are failing to address the housing crisis. Rents continue to rise. The new minimum wage will do little if anything to change the precarious situation that those on low wages face.
There is a shortfall of 640,00 in low-cost housing across Australia according to Anglicare. The lowest median rents in Sydney, for example, for a two-bedroom home are upwards of $350 per week and for a three-bedroom home are $500, $600, $700 or higher depending on the suburb. Then there is availability, there is a scarcity of rentals on the market.
The crisis is not just in Sydney. Rental accommodation in other capital cities and regional areas is also in short supply and unaffordable for someone on the new minimum wage of $882.80. Anglicare defines affordable rent as being no more than 30 per cent of a household budget.
There is an urgent need for substantial increases in government funding from all three levels of government for the construction of public housing, restoration of existing public housing and purchase of additional homes from the private sector.
The money to do this could be found if the government put people’s interests first. It should cancel the Stage Three tax cuts and the nuclear submarine order, thus saving more than half a trillion dollars.
The CPA is calling for:
- The minimum wage to be increased by 40 per cent for a real living wage
- A living income, above the poverty line, for all unemployed, pensioners, carers, and others on government payments
- Job security – abolition of contract and body hire labour, no use of casual labour where work is ongoing
- Equal pay for work of equal value
- Further action by the government to reduce energy costs and bills
- Regulation of the private rental market to protect against exorbitant rent increases
- Young workers paid an adult wage where doing same work as adults
- Shorter working week without loss of pay
- A more progressive tax system so that those on high incomes pay a far higher rate of tax.
These policies cannot be won by sitting around the table in negotiations or before a commission. They will take united and militant struggle by trade unions and community organisations. At the same time industrial relations legislation should be reformed in the interests of workers, including the unfettered right to take industrial action.