The Politics    Friday, June 1, 2018

Twenty-four dollars and some sense

By Nick Feik

The best prospect for workplace reform is a change of government

The Fair Work Commission today increased the minimum wage by $24.30 a week for around 2.3 million workers.

The ACTU had urged for it to be increased by 7.2 per cent. The Australian Retailers Association proposed that no increase be made. The commission basically split the difference, settling on 3.5%.

Predictably, the unions responded that it was a welcome increase, but not enough, because it would still leave some full-time workers in poverty, while employer groups argued that it would harm small businesses and cost jobs.

Fair Work Commission president Justice Iain Ross disagreed with the latter argument, saying that “the level of increase we have decided upon will not lead to undue inflationary pressure and is highly unlikely to have any measurable negative impact on employment”. The summary of the decision highlighted that economic indicators now point more unequivocally to a healthy national economy and labour market, providing impetus for the wage increase.

The government has welcomed the decision. It will join employer groups in telling the nation that the increase is well above the inflation rate, and that the minimum wage is now close to the highest in the world. Its budget projections require across-the-board wage growth, but with no legislative plan to actually promote this, its leaders will find it handy for the independent umpire to have raised some wages. Then the government can continue to bang on, as it does ad infinitum, about the dangers of Bill Shorten and the unions, and not have to compromise politically.

The truth is, wage stagnation has been a problem, and there’s little sign that the magic of the marketplace and trickle-down effects will deliver the kind of national wage increases that the budget rests on (up to 3.25 per cent in 2019–20). Interestingly, even the Fair Work Commission summary today noted [$] that the budget forecasts in respect to wage growth “appear overly optimistic”.

The government will undoubtedly use the report to excuse itself from taking any action of its own that might result in wage increases. Certainly, no one in government seems in a rush to accede to union calls to improve industrial relations laws for workers, or to address the preponderance of wage theft and underpayment in industries such as retail, hospitality, agriculture, cleaning and care work. (Huge proportions of workers in these sectors would dream of getting the official minimum wage.)

In the latest news on this front, a parliamentary inquiry into the franchise sector was “handed a ‘chilling’ succession of similar stories by small-business owners who claim franchisors suggested they should steal wages from vulnerable workers,” reported The Guardian today.

The deputy chair of the committee, Labor senator Deborah O’Neill, said that “there’s a consistency of storytelling here. [Franchisees have] been sold a business model that too often depends on wage theft to make a sustainable business.”

The recent arrival of Amazon – not renowned for great labour practices – and the continued growth of the internet retail sector will do nothing to ease tensions between employers and employees in the bricks-and-mortar retail sector. The hearts and hopes of workers will have been raised by the commission’s decision today, but their only serious prospect for reformed workplace rights and conditions lies with a change of federal government.

On a final note, speaking of employees (but not tensions), Paddy Manning will return on Monday. Thanks for having me this week.

PS Sorry that there was no pub test today, but we can safely assume that bartenders on the minimum wage are quietly pleased, and drinkers don’t mind that at all.

since this morning

Pauline Hanson has expelled Senator Brian Burston from One Nation.

The company at the centre of the live sheep export scandal is now the focus of a criminal investigation into its treatment of animals.

House prices across Australia’s major cities weakened for the eighth consecutive month in May.

The South Australian attorney-general, Vickie-Chapman, says she will sponsor a bill to decriminalise sex work, boosting the bill’s chances of becoming law.

in case you missed it

The ANZ bank is expected to face criminal cartel charges after an investigation by the Australian Competition and Consumer Commission.

In a strange and tormented interview on Sky News, Pauline Hanson lashed out, apologised to voters and cried over recent events involving Brian Burston.

The head of the National Disability Insurance Agency has apologised to the family of a Tasmanian man who died waiting for vital medical equipment. The case has exposed major faults in the scheme.

by Mark Tedeschi
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Nick Feik

Nick Feik is the editor of The Monthly.


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