Calls to end low pay ‘design function’

The purchasing power of many Australians will continue to decline without federal government intervention, according to a study of trends in the economy.

The report released on Wednesday by Adelaide Law School, Melbourne Law School and the Center for Future Work suggests wages should rise by more than 4% a year to rebalance productivity growth, inflation and income distribution .

With soaring inflation and rising interest rates, union leaders are calling for a 5.5 percent wage hike for one in four workers that builds on Fair Work’s annual legally enforceable minimum wage review Commission.

Labor market experts want reforms for gig-economy workers who operate between cracks in current wage laws, a crackdown on wage theft by employers who underpay their staff, an end to caps on wage increases in the public sector and higher minimum wage rates overall.

Co-author economist Jim Stanford said in the report that it had become a “design feature” of the Australian economy to try to keep wage growth low.

It is not optimistic that wages will emerge from a decade-long crisis without active wage-raising measures.

The research finds no hard evidence that wages are rising, despite unemployment falling to 4%, with real income falling as inflation bites into the value of hard-earned dollars.

Survey data released by the Australian Council of Trade Unions shows that women in particular are dissatisfied with the federal government’s approach to lowering the cost of living (74% dissatisfied), persistently low pay (61 %) and unaffordable housing (73%) .

But employers are warning the Fair Work Commission that it must be careful with economic conditions still precarious.

Australian Industry Group CEO Innes Willox is proposing a ‘modest wage increase’ of 2.5%, given the added benefit of the 0.5% increase in the pension guarantee paid by employers from July 1 and the tax increase on low and middle incomes. offset in the March budget.

“Adding these increases to our proposal would result in the equivalent of a 4.3% increase in pre-tax earnings for low-wage employees,” he said.

Tess Hardy, co-author of the wages report, said a combination of underfunding, outsourcing and precarious casual jobs has suppressed wages in some of the most important parts of the economy.

“The Royal Commission on Aged Care has identified this problem and asked the government to fix it, but so far the government has done nothing to improve wages,” she said.

The industrial relations arbitrator is soon to rule on calls for a 25% pay rise for older workers and home care workers, which unions say would more fairly reward their roles, skills and working conditions. hard work.