National wage case decision gives low-income earners breathing space but still a long way to go

Blond And Brunette Little Girls Laughing On Swing Together

Article by Francis Sullivan, as published in Eureka Street

Despite last week’s decision by the Fair Work Commission to push up the national minimum wage by 5.2 per cent, millions of Australians, in all parts of the country, will continue to live in poverty and on survival wages. The facts are that the Commission’s decision takes the minimum wage from $772 a week to $812, an increase of $5.70 a day, not a fortune but better than nothing.

And while the decision is welcome and turns around a decade of real wage cuts under the Coalition Government, we are still living in a society that is divided economically, culturally and very much in terms of opportunities.

Make no mistake, workers on low incomes and our nation’s most underprivileged will continue to struggle to make ends meet, they will struggle to pay the rent, to put food on the table, to cover health costs and to ensure their kids get the same opportunities as the rest of their classmates.

This is drawn into stark relief by the simple fact that the minimum wage continues to be around 20 per cent lower than the poverty line, which The Melbourne Institute of Applied Economic and Social Research has set at $1091 for a family of four with one working adult. In what world do we think it is appropriate for the minimum wage to be below the poverty line for the average family?

Around 3 million working people and their families live in poverty, with roughly a third of people in poverty relying on wages as their main source of income.

One hundred and ten years ago Australia and New Zealand were the first two countries in the world to establish minimum wages. But this has not guaranteed workers a quality standard of living.

Cuts in penalty rates, the expansion of casual work and temporary jobs and the erosion of job security have all undermined working life in contemporary Australia. We are now in a situation where income inequality between the highest and the lowest paid is at a 70-year high.

The International Monetary Fund recently found Australia is among the countries that have experienced the most rapid increase in income inequality in recent decades.

This isn’t just about families struggling. The ACTU suggests that if this doesn’t change Australia will be a ‘fully Americanised society of high inequality and dead-end jobs, with long working hours, no holidays, zero job security and poverty pay levels’. And where does this take us: high levels of crime, discrimination against minorities and a broad range of social problems.

Earlier this year The Australian Catholic Council for Employment Relations (ACCER) recommended an increase of 6.5 per cent to the minimum wage. Its submission was based on research from the Australian Catholic University (ACU) and concluded ‘a significant cohort of Australian workers who are dependent upon the National Minimum Wage … are not receiving a decent living wage’. The report also argues that anything less than a 6.5 per cent increase would be inadequate to protect them from ‘ill effects of poverty and disadvantage’.

At the same time as this submission was made to the Commission, many other organisations were proposing that the minimum wage should be at least 60 per cent of the medium wage, these included the Australian Council of Social Service, the Australian Greens and the Australian Manufacturing Workers’ Union among others.

This approach is not unprecedented.

In 1995, the national minimum wage was equivalent to 64 per cent of median full-time weekly earnings, this fell to 55 per cent in 2008, and it is now below 50 per cent.

To bring the minimum wage back to 60 per cent of medium earnings would require a $180 a week lift. It would be a brave commission and government that would advocate for this sort of increase.

What does need to be very much prosecuted, however, is for businesses to hand back more of their profits to lowly paid workers. Australia is currently enjoying near record low unemployment, high productivity and record profits. But despite this, the share of GDP being returned to working families is at a record low. Australia needs a plan to ensure that over time, wages grow for working people and a system that will deliver on that plan. The current system is not delivering for working people.

This is one of the greatest challenges facing politicians and policymakers and needs to be one of the new Government’s key priorities.

The Fair Work Commission’s decision to increase the minimum wage by 5.2 per cent is welcome, but the struggle for low-income families to achieve a decent standard of living continues to be beyond most.

In a country like Australia, every worker should be able to, at the very least, pay their bills, support their families and still have a little left over for a decent standard of living.

Article & photo source: Eureka Street, 20 June 2022

Francis Sullivan is the Chair of Catholic Social Services Australia

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