Mixed response to Fair Work wage rise decision

June 6, 2024
Feminised industries were the big losers in the Fair Work wage rise decision. Photo: Australian Services Union's 2012 campaign for equal pay

The Fair Work Commission (FWC) decided on June 3 to award the lowest-paid quarter of Australia’s workforce an extra $33.11 a week.

For 2.6 million workers, 21% of the workforce, facing rising costs of living and housing affordability crises, this is negligible.

Even the FWC acknowledged that “Modern award minimum wages remain, in real terms, lower than they were five years ago … and employee households reliant on award wages are undergoing financial stress as a result.”

The new national minimum wage is now $47,627.06 a year and the new minimum hourly rate is $24.10.

The Australian Council of Trade Unions (ACTU) welcomed the FWC’s decision to raise minimum and award wages by 3.75%, despite having argued for 5%.

ACTU secretary Sally McManus said the FWC’s decision “allows people to keep up with inflation and have a small real wage increase”.

But Steve Murphy, national secretary of the Australian Metal Workers Union, posted on X on June 3 that he was very disappointed with the FWC decision. That comment has since been removed.

Employer groups had been pushing for a minimum wage rise of no more than 2–2.8%. They argued that as inflation is forecast to be 3.5% this financial year, and down to 3.2% this time next year, any further rise would pose a risk to that trajectory.

Commonwealth Bank economist Stephen Wu admitted to The Guardian on June 3 that, even with the rise, real award wages would remain “a little below their pre‑pandemic levels”.

The ACTU ran only an online campaign for its pitch for a 5% rise.

It said it was “disappointed” the FWC had not agreed to “interim pay rises to workers in key feminised occupations”, such as early childhood educators and other care workers.

It said it would have been “a vital first step” in valuing these workers’ “critical work”. However, it “welcomed” the FWC’s acknowledgement that such workers and occupations have been “undervalued”.

 The FWC said those most likely to be affected by its ruling would mostly work part-time, are predominantly women and almost half of are casual employees.

It said the “total wages cost of the modern-award-reliant workforce constitutes less than 11 per cent of the national ‘wage bill’, and that “[a]bout two-thirds of the modern-award-reliant workforce are employed in only four industry sectors”.

While it said “a primary consideration has been the cost-of-living pressures”, it is arguable that the rise will have any impact at all.

“Modern award minimum wages remain, in real terms, lower than they were five years ago, notwithstanding last year’s increase of 5.75 per cent, and employee households reliant on award wages are undergoing financial stress as a result”, it said.

This implies that it, too, knows the wage rise will be negligible. But its excuse is that “labour productivity is no higher than it was four years ago and productivity growth has only recently returned to positive territory”.

But “labour productivity” in the lowest-paid, highly feminised, industries, will never be high because they necessarily involve labour-intensive care services, which are systematically undervalued under capitalism.

More than half (56.7%) of those on minimum wages are women, according to the FWC.

The ACTU’s submission called for a 5% rise across all award wages, plus an extra 4% rise in feminised industries. This would have helped address “systemic gender pay inequity”.

The ACTU said feminised industries such as early childhood education, health support and disability home care have been “historically undervalued”. This has contributed to a gender pay gap of 21.7%, according to the Workplace Gender Equality Agency.https://ssl.gstatic.com/ui/v1/icons/mail/images/cleardot.gif

The findings of the FWC’s “gender equity research project” will apparently be completed by next year’s wage review.

This is yet another reason why it is wrong for the union leadership to “welcome” the FWC’s ruling on pay.

The ACTU needs to organise and lead a campaign to close the gender wage gap, like McManus did in 2012 as a leader of the Australian Services Union.

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