Sue Bolton
Both Coalition and Labor federal governments have traditionally opposed ACTU applications to the Australian Industrial Relations Commission (AIRC) for annual for increases to the minimum wage.
However, it is only since Prime Minister John Howard's federal election victory in 2004 that the Coalition has revealed that it intends to introduce changes to industrial relations laws that could result in the minimum wage being frozen. It would have been political dynamite if this had been revealed during the election campaign — no wonder they kept it quiet.
Howard was quoted in the February 26 Australian saying: "We will keep the minimum wage — but it has to be a minimum ... that takes account of the employment opportunities that are available and we must never have a minimum wage that prices people out of work."
The implication is that unemployment, especially among "unskilled" workers, is a result of the minimum wage being "too high". But where's the evidence for this claim?
The government never produces any evidence. It just makes assertions without evidence, because there is no evidence. If the government's rationale was true, there would be no unemployment in the sectors of the economy where low wages predominate, and there would be no unemployment in low-wage countries.
The reality is that employers always try to cut the wages' bill by employing as few employees as they can get away with, regardless of wage levels. And employers always claim that they can't afford wage increases, regardless of how profitable their firms are. Telstra and the big banks for example have reaped record profits almost every year since the mid-1990s, and almost every year they have shed thousands of jobs.
The only reason that the government is planning to attack the minimum wage is to build up pressure to drive down wages across the whole work force — to further increase booming company profits.
The government has tossed around different means by which it can attack the minimum wage. Federal workplace relations minister Kevin Andrews has suggested three options — that the minimum wage could still be set by the AIRC according to new parameters; that it could be done by an AIRC division that has more economic expertise; and, finally, that the AIRC could be replaced with a panel of experts like the system in Britain.
The Business Council of Australia is pushing for Reserve Bank governor Ian Macfarlane to be part of a panel of "experts" to set the minimum wage.
Regardless of which "experts" the government chooses to decide on the minimum wage, you can guarantee that none of them will ever have to contemplate living on the minimum wage.
There will probably be one token representative from the ACTU, with rest being only interested in increasing business profits.
Minimum wage workers won't have a say in their wage levels unless the ACTU changes tack and does what it hasn't done in many years — initiate a political and industrial campaign for a big increase in the minimum wage.
According to the March 3 Australian, federal treasurer Peter Costello wants to go even further than Andrews by eliminating the minimum rates of pay that are fixed in awards and replacing them with a single national minimum rate of pay.
Many in the union movement are comparing the government's plans with the minimum wage system in the United States. ACTU secretary Greg Combet says that the minimum wage in the US has only been increased once since 1996, and then only by US$0.40. That is the "Brave New World" that Australian workers have to look forward to unless the ACTU finds the fortitude to lead a fight.
From Green Left Weekly, March 9, 2005.
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