The ACTU has done a clever public-relations job with its new wage claim. It has been portrayed as a claim for the lowest-paid workers. Put in that light, the claim has merit. Australia, despite it economic woes, is by world standards a rich country. It is only proper that minimum adult wages in Australia are capable of sustaining a family. That was the standard set in the Harvester case in the early years of this century and the reasoning still carries weight. There is no point to economic reform, budgetary discipline and efficiency drives in both the public and private sector unless it bears fruit. That fruit must include rising living standards for Australians at the bottom of the income scale.
However, the latest ACTU wage claim, while asserting that the lowest paid should get more, goes beyond this. It says that the minimum wage should go up from $349 a week now to $456 a week in three years’ time … from $9 an hour to $12 an hour, but it also says that wages above this should go up proportionately. This element was given less publicity by the ACTU.
So the claim is not only one for lifting the bottom wage rate up, but one of lifting all wages up. The president of the ACTU, Jennie George, is right to say that all workers are entitled to a decent standard of living and a decent living wage. But she should tell the whole story of the wage claim.
The trouble with this wage claim is that it will also deliver increases at higher levels across all awards. Some workers will get as much as $95 a week extra. True, the increase can be absorbed in over-award payments, but the thrust of the claim is for an across-the-board increase.
The ACTU justifies this approach by saying that in the absence of an Accord there is no chance for it to negotiate a social-wage package and in an environment of government-spending cuts it has to press for more cash. This approach is flawed. It leads to inflation, as employers inevitably are forced to pass on wages costs that are not sustained by productivity rises. Across-the-board rises are inevitably not linked to productivity increases, but occur irrespective of conditions in each enterprise.
But that is not to say the Harvester case principles have no place in Australian wage-fixing. They do. It is very important for government to lay down some minimum wages and minimum conditions. That is the mark of decent society. Justice Higgins ruled in the Harvester case that those employers or corporations who could not pay the basic wage should not be in business. Even in the days of extensive international competition, this should still hold true. A nation like Australia must compete internationally, but not at the cost of wage-slave conditions. We must use our brains and natural resources to compete; not exploitation.
However, when dealing with wages above the minimum standard, it must be up to workers in each enterprise, either collectively or individually, to bargain wages and conditions according to their productivity. The days of across-the-board pay rises imposed by a court must end. That is not the path to greater prosperity for the Australian workforce.
The ACTU’s attempt to cling to this pattern is merely a power grab, so its officials can exercise power over the way enterprises deal with their workforces through a centralised agency.
The best way for the federal government and employers to head off this trend is to ensure that decent minimum standards are guaranteed. Then this week’s ACTU PR stunt would carry no weight.