The Herald's editorial "Helping low-paid workers to help us all" (NH 27/3) astutely observes the economic and social benefits of a meaningful minimum wage increase. A real and substantial increase in the minimum wage and award wages will make a big difference for ordinary people struggling through the tail end of a cost-of-living crisis, where groceries, rent, housing and energy prices have crushed household budgets and driven more families into debt. While the federal government's redistribution of tax cuts from July 1 will make a significant difference, many retail, hospitality and other low-paid workers need much more than a tax cut to restore their standard of living, which has eroded so badly in recent years.
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All recent credible economic analysis shows that wage increases for the lowest paid workers flow back into the community and through the cash registers of small and large businesses. Consistent with the theory of virtuous cycle economics, minimum wage earners don't squirrel away this money for the next Aspen skiing or French Riviera holiday. They spend every dollar on the essentials. It goes back into community to generate even more positive economic activity. Trickledown economics has been thoroughly debunked and should be retired with the damaging absurdity of Reaganism and Thatcherism of the 1980s.
In 2023, big business lobbyists argued for real wage cuts and adopted their customary Chicken-Little squawk, warning an excessive minimum wage increase would be "additional fuel to inflation" (the ABS monthly CPI indicator has subsided from 6.8 per cent to 3.4 per cent in the past 12 months) and risk "higher unemployment" (unemployment dropped to 3.7 per cent seasonally adjusted in February). The Fair Work Commission's Expert Wage Panel ignored these assertions and awarded a 5.75 per cent increase to minimum award wages and 8.64 per cent increase to the National Minimum Wage. This doesn't appear to have unleashed the economic maelstrom which the bosses' lobbyists predicted. If anything, economic conditions are much improved on 12 months ago. Clearly, paying minimum wage workers a fairer wage has not only been good for the workers but good for the economy.
There's much more to be done to ensure all workers share in the fruits of their labour. Business warns that wage increases must not be passed on without corresponding productivity improvements. This is fair. I look forward to the delivery of the further 9 per cent increase owed to retail workers from the productivity gap of the past 20 years.
In 2024, these lobbyists are lining up again with the same old portents of doom. Given their terrible record in previous years, getting it wrong on every occasion in recent memory, it would be wise to put them on mute.
The SDA represents more than 210,000 retail, fast food, and warehouse workers in Australia, with more than 13,000 working in the Hunter and Central Coast. The union has lodged its submission with the Fair Work Commission supporting the ACTU claim for a 5 per cent wage increase for minimum award workers. These workers have acutely felt the pain of cost-of-living increases. 75 per cent of workers recently surveyed told us that their financial situation was worse today than it was two years ago. A mere 6 per cent of workers claim they are in a better financial situation than they were two years ago.
This year's decision is critical for these struggling workers, with one member recently sharing, "The cost of living has taken the living out of life. We can barely afford to survive. Our wages only barely cover the necessities leaving us with nothing to save effectively over time."
The Herald editorial was accurate when quoting the minister regarding the "deliberate design feature [of our economic architecture]" to keep wages low. However, we must remember these are not the minister's words. He was quoting the former Liberal minister for finance, Matthias Corman, on March 8, 2019.
Five years later, it is refreshing to have a federal Labor government that isn't deliberately suppressing wages, working with and not against the trade union movement, and is on the side of low-paid workers. We all benefit from this approach.
