Wages at an all time low means unions will have to break unjust laws

March 9, 2022
Brisbane May Day march 2021. Photo: Alex Bainbridge

Following two years of a global pandemic, wage growth for workers is at an all-time low. Meanwhile, the cost of living for ordinary people is steadily increasing.

The Australian Bureau of Statistics said on February 23 that wages have only grown by 2.3% over the past year, compared with previous decades when nominal wages grew by 2.5% or more a year.

The situation worsens when you take into account that prices for consumables have risen by 3.5% over that same period. Fuel, housing and transport costs have increased by 32.4%, 21.7% and 12.5% respectively. Vegetable, beef, childcare and medical costs have risen from 4.2% to 8%, Unions Australia said on March 7.

Nominal wage increases are not keeping up with inflation.

The Reserve Bank of Australia predicts that wages will remain stagnant and that households can expect inflation to outstrip wages until at least the end of this year. Economists say the impact of the Omicron variant of COVID-19 will slow wages growth even more. Meanwhile, corporate profits soared by more than 13% last year.

Of course, that depends on what the union movement does.

The Australian Council of Trade Unions said on February 22 that workers are “copping the worst real terms pay cut in 20 years” and that “any recovery from the pandemic relies on real wage growth so that working people can keep up with the rising cost of living”.

But, the ACTU has not launched a campaign for wages’ growth.

The federal government is refusing to address the cost-of-living pressures and wage stagnation. While federal Treasurer Josh Frydenberg acknowledged the pressures, he said on February 22 they would be addressed by tax cuts.

But tax cuts for the rich cannot compensate for the losses in overall income due to wage stagnation and they do little to directly address the immediate issues of low wage growth and higher costs of living. This is because most workers are not in the income bracket the tax cuts will mostly benefit.

Frydenberg’s tax cuts will also be paid for by cuts to services and welfare.

The government is bragging about the country’s 4.7% GDP growth, saying it is leading the world. This wild reading ignores the fact that the wages share of GDP has dropped to below 50%.

Part of the reason for wages stagnating since 1996 is that successive Coalition governments have introduced draconian laws that make most industrial action illegal; legal industrial action is highly restricted and this intimidates workers.

Australia has the most draconian industrial relations laws in the OECD. This has left many workers languishing on award wages without the benefit of collective bargaining agreements. Meanwhile, bosses have the power to take industrial action against workers, such as locking out their workforces.

The only way to lift wages is if unions go on the offensive and build confidence among workers to take industrial action — legal or illegal. Workers should not be made to pay for the global pandemic. Unions need to organise to demand fair wages, and a good time to do that is before a federal election.

[Sue Bolton is the Socialist Alliance candidate for Wills. She is a long-time councillor in Moreland.]

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