Fear of working-class unrest triggers Australian minimum pay increase


Fear of working-class unrest triggers Australian minimum pay increase

Mike Head

6 June 2018

Anxiety in ruling circles about an eruption of the class struggle, after decades of suppression of workers, led to the country’s industrial tribunal granting a slightly-above inflation rise in the minimum wage and related pay scales last Friday.

Warning that the living standards of many low-income households continued to deteriorate over the past 12 months, the Fair Work Commission (FWC) granted a $24.30-a-week minimum-wage increase. Although a pittance, it was the highest rise in the annual pay rulings for eight years.

From July 1, the minimum wage, which directly affects about 200,000 workers, will rise to $719.20, an hourly rate of just $18.93. The 3.5 percent rise will flow to 2.3 million others on industrial awards, or about 18 percent of the workforce.

After tax, however, the rise would be only about 2.85 percent for minimum-wage workers, or $17.76 a week.

In a revealing display of unity, the Liberal-National government, the official Labor Party opposition and the trade union bureaucracy, represented by the Australian Council of Trade Unions (ACTU), all welcomed the ruling.

The industrial judges used cautious language, assuring big business that their decision would ensure rising profits and higher productivity. But they explicitly shared concerns voiced by the central bank, the Reserve Bank of Australia (RBA), that years of record poor wages growth have generated dangerous discontent.

“Low wages growth has significant economic and social consequences,” noted the FWC panel, led by former ACTU assistant secretary Iain Ross. “As RBA Governor Philip Lowe has remarked, sustained low wages growth diminishes the sense of shared prosperity.”

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