Fair Work Australia is undertaking its annual review of award wages. Just as you’d expect, the federal government’s submission opposes any significant increase in the minimum wage and the major employer organisations have called for no increase at all.
A wage freeze, or a below-inflation increase, amounts to a cut in real terms. This is all the more so because the rise in the minimum wage, approved last year, was delayed until this February.
Now, how do you think the bosses calling for no wage increase would react to a legislated freeze on the price they could charge for goods and services?
A rise in the minimum wage is vital to those that need them most.
Unionised workers, or those with very particular skills in high demand, can negotiate above award pay and conditions. But, for many workers in sectors such as hospitality, retail, cleaning, delivery driving and aged care, an increase in the award minimum is their only chance of a pay rise.
These are the so-called unskilled workers who, disproportionally, are women, migrants and young people and without whom society would not function.
While wage growth is trickling along at a feeble 1.4%, last year profits rose by a whopping 15.1%.
Even pro-capitalist economists have been raising the alarm, pointing out that a rise in real wages is needed to stimulate economic growth and that lower paid workers will spend their wage increases.
Bosses do understand this, but they all dream of everyone else’s workers getting paid more while they pay less. It’s precisely why we need to increase the minimum wage.
However, the squeeze on workers far predates the COVID-19 pandemic.
The wages share of national income has been steadily falling, since its high point in the mid-1970s. In 1975, wages were equivalent to more than 60% of GDP, whereas today it is just over 50%. This share of gross domestic profit has shifted to profits.
Put another way, in today’s dollars more than $4 trillion has shifted from workers’ pockets to corporate profits.
Grasping this reality makes it easier to understand why, despite all the new technological innovations over that time, our lives have not getting any easier and why we have less leisure time and paid leave.
Nearly all the gains in productivity have been taken by the bosses for themselves.
The decline in the wage’s share of national income began under Labor Prime Ministers Bob Hawke and Paul Keating governments, through the Prices and Incomes Accord in which, tragically, the union movement enforced “wage restraint” to help Australian capitalists.
The theory was that a rising tide would float all boats.
In the early days of the Accord, wages increased even if they started falling as a percentage of national income. However now, Australia is starting to resemble the United States where wages have been falling in both real terms and as a proportion of national income.
There is a class war going on and workers have been on the losing side for more than three decades.
A significant increase in the minimum would be a good starting point in our effort to turn things around.
However, we can’t expect Fair Work Australia to deliver this willingly. Like every improvement to workers’ wages and conditions, it will require sustained industrial and political pressure. That in turn means we will have to find ways to organise workers in industries that have not traditionally been unionised.
However, fighting for better wages and conditions is not enough. This has to go hand-in-hand with a campaign to improve the lives and conditions of workers when they’re not at work, and for all those workers not in paid employment.
We need to take back the wealth, not just as wages in our pockets, but through taxes on the big corporations and an expansion of the public sector.
This has to include a dramatic plan to increase our stock of public housing, lifting JobSeeker above the poverty line, pulling dental care and general practice into the public health system and making university free again.
By themselves, these measures don’t threaten the heart of the capitalist system, but they point to a different set of priorities from the insatiably greedy the profits-first system.
Capitalism most certainly needs to be largely demolished to have a hope of stopping catastrophic climate change. However, even these modest policies are not on Opposition leader Anthony Albanese’s election agenda.
This underscores why the prevailing union approach of trailing behind Labor, and being grateful for the crumbs it is prepared to offer workers, is a failed strategy. It doesn’t put any pressure on the Opposition to improve its policies and it doesn’t help it get it elected anyway.
It’s a false pragmatism that paves the way for further retreat.
Now is the time to campaign hard, not for what a future Labor government might consider reasonable, but for what workers deserve.
That’s the realism we need right now.
[Sam Wainwright is a national co-convenor of the Socialist Alliance.]