The Guardian April 7, 1999

Maintaining the wage

by Rohan Gowland

The ACTU, state and federal governments and employer representatives have 
now handed in their final submissions to the Living Wage Case, currently 
before the Australian Industrial Relations Commission (AIRC). In their 
submissions Liberal/National Coalition Governments have demonstrated their 
objective is to erode the system of awards and minimum wage protection.

The Joint Governments (JG) submission, from the federal and state Coalition 
governments, argued that rural regions and small businesses should be able 
to opt out of paying award wage rises.

The JG submission claims that forcing employers in these areas to pay the 
minimum wage would "put jobs at risk".

It proposes changes to the "economic incapacity principle" to make it "more 
accessible" for employers to plead "incapacity to pay".

This principle, it argues, should be made "accessible to all 
enterprises, regions or sectors facing financial difficulty" (emphasis 

The definition of "financial difficulty" would also be broadened by the 
deletion of the words "very serious and extreme".

The proposal says: "Any respondent or group of respondents to an award may 
apply to, temporarily or otherwise, reduce, postpone and/or phase-in the 
application of any increase in labour costs..."

Based on the JG argument that wage rises cause job losses, this principle 
could be applied very broadly to virtually any employer. Small businesses 
and rural employers, however, are the most likely sector to make use of 
this change.

Note the inclusion of the words "or otherwise", leaving open the door for 
employers to permanently avoid paying minimum wage rises.

Corporate rules

The Government's real agenda is deregulation of the labour market. It wants 
to make workers at the bottom of the labour market more vulnerable, or 
"flexible": lower wages, minimum conditions, less protection by unions or 
industrial tribunals.

The aim is to remove "barriers" to the free operation of private 

For this reason, Reith has put forward for "considered debate" a proposal 
to take the power to set minimum wages from the AIRC and give it to 
Parliament under the Corporations Power in the Constitution.

This would undermine unions' ability to achieve blanket coverage of workers 
in different industries under the one award via the AIRC.

The Government's planned reforms for the unemployed complement this 
strategy for the low-paid. For instance, employers could recruit workers 
from the unemployed and would be allowed to pay them below minimum wages as 
a reward for reducing unemployment.

Similar to the "youth wage", this has been dubbed the "dole wage". In 
addition, in the case of such workers, the employer would be exempt from 
unfair dismissal laws.

Together, these changes make the bottom strata of the labour market, the 
low paid and unemployed workers, less secure and more vulnerable to new 
heights of exploitation.

In its submission to the Living Wage Case, the ACTU has argued for an 
increase in the Federal Minimum Wage from $373.40 to $400 per week for 
full-time workers, and proportionally less for part-time workers.

John Evans, General Secretary of the Trade Union Advisory Committee to the 
OECD, on the closing day of the Wage Case, dismissed arguments that raising 
minimum wages costs jobs.

Instead he argued that raising the minimum wage for the low paid is shown 
to lessen the overall stress on a country's social security/welfare system.

The outcome of the Wage Case is expected in the next two months.

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