Big business and Morrison government want the minimum wage frozen

Photo from AAP
By Joe Montero

In its submission to the current minimum wage case, Australian Chamber of Commerce (ACCI) and Industry has put that Australia cannot afford it. It wrongly suggests that Australia already has one of the highest minimum wages in the world and poses higher wages as counter to creating jobs.

Both the Housing Industry Association and National Retail Association have put in similar submissions.

The submission attacks the Australian Council of Trade Unions (ACTU) case for a 355 percent increase. This is $20.53 per week. Hardly enough to make a huge difference. But it is a start in the right direction.

The Australian Council of Social Services (ACOSS) has made id  own call for a “substantial increase” to the minimum wage.

Meanwhile, the Morrison government is also saying that the minimum wage must be kept down. It warns that not doing this will hurt the effort to come out of the economic damage caused by Covid-19. It warns about the given “uncertainties in the domestic and international economic outlook,” and calls for a “cautious approach”.

Truth is. this is not a new argument. Major big employer bodies and the government have consistently increasing the labour share. The current stand is a return to the pre-Covid era. The wages share is in a longer-term decline, and the minimum wage is following this.

Creating a source of cheap labour from those desperate to survive

Understandably, the front to keep down the minimum wage has drawn widespread condemnation.

The underlying policy is to further decrease the wages share. Keeping the minimum wage down helps make this a reality. There is a connection between this and the effort to substitute more normal full time and permanent jobs with part-time casualised ones on lower wages.

It is the reason why JobSeeker was slashed back to poverty level and JobKeeper has come to an end.

All this is based on the premise that increasing the proportion going to major shareholders will induce investment in the economy, and that this will create jobs, and eventually, increase wages across the board.

An estimated 2.3 million workers have their pay set relative to the minimum wage, and 180,000 of them are on the minimum wage that is presently at $753.80 per week.

The Morrison government is right about the uncertain international and domestic outlook and that it is important to act in a way that protects Australians from harm. But to hold down the minimum wage, wages in general, and take away from the unemployed and others who depend on Centrelink payments, neither protects against the uncertainly nor defends Australians from hurt.

Wages are not too high. Part of the problem is that they are too low. Gearing the economy to become even more dependent on the creation of cheap labour may swell the bank accounts of a few individuals. But it turns it brings in wage theft as the means of making a profit, rather than innovation and productive effort.

This undermines the health of the economy.

The position of ACCI and the Morrison government is also socially destructive.  Australia’s economic future and sense of fairness will decide what sort of society Australia is going to become. Widening the gap between the haves and have nots and building a sense of exclusion, is not going to generate the unity to work together.

Raining the oncome of the majority, especially those at the bottom will.

The ACTU is right to call for a meaningful increase in the minimum wage, and it is right  to call for more government expenditure on social services. Even the Reserve Bank has called for an increase in the wages share.

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