top of page

A fair day's pay: goodbye to all that

Sharan Burrow

Be afraid. Be very afraid. There is a strong likelihood that this year's minimum wages case may be the last. From July, the government will have control of both houses of parliament for the first time in decades.

This gives John Howard the equivalent of a legislative blank cheque to implement the changes that he and a growing chorus within the business elite have always wanted.

The government has said it will use its unexpected new power to carry out a hostile takeover of state industrial systems and reduce the role of the independent Industrial Relations Commission (IRC) to settle disputes and set fair minimum standards.

It plans to push people on to individual contracts, make it harder to bargain collectively and tear up the award safety net that has underpinned fair standards of pay and conditions across our workforce for a 100 years.

These changes will affect up to eight million working people who will be brought under a new national system. They pose a major threat to the living standards of working Australians and our families.

"The minister is also on record as saying he thinks minimum wages in Australia are set about $70 a week too high."

One of the main assaults the government plans is to change the way minimum wages are set. Employment Minister Kevin Andrews has recently expressed support for a system in which government has the final say over wage rises. The minister is also on record as saying he thinks minimum wages in Australia are set about $70 a week too high.

This means that he thinks people who work full-time, including hotel workers, cleaners, waiters, bar attendants and sales assistants, should be paid less than $400 a week. This is less than $10.50 an hour.

Most working families are already struggling. There is absolutely no way they could survive if their wages are forced so low.

The argument the government uses to support its push to change the way minimum wages are set is that the IRC lacks economic rigour. But this is a nonsense.

In fact, the commission has a legal requirement to consider the employment and economic impact of its decisions and more than 80 per cent of its 100-page finding in last year's wage case was devoted to the state of the economy and consideration of the possible employment impact of a wage increase.

The fact is employer groups and the government have failed to provide convincing evidence to the commission that moderate increases in minimum wages cause job losses. Overseas comparisons show this to be the case. For example, over the past five years minimum wages have grown by a modest 2.9 per cent in real terms in Australia but have fallen by nearly 12 per cent in the US.

In the same period, jobs growth in Australia has outstripped the US by more than three to one. Any move that gives the government more control over minimum wages would be a step down the path of the US where politicians have the final say and there has been no pay rise for people on minimum wages for eight years.

And here we get to the heart of matter.

After July, there will be nothing to stop the Howard government from passing laws that will remove the last vestiges of fairness in our workplaces and tilt our economy towards the reality of the US with its dramatic inequality and the widespread social problems. Worse, in fact, for even the US respects the right of workers to collectively bargain when the majority of employees make that choice.

Forcing down minimum wages will mean the loss of the Australian tradition of a fair day's pay for a fair day's work.

This is at the heart of the Australian way of life and no government should be swayed by the agenda of big business and undermine our tradition of fairness and, with it, the economic security of working families.


Sharan Burrow is president of the Australian Council of Trade Unions. This opinion was first published in The Advertiser (Adelaide) on Wednesday 13 April 2005.


bottom of page