By Chris Taylor, CCH senior writer
The Australian Fair Pay Commission (AFPC) has resisted the temptation to bow out with a show of generosity, leaving the federal minimum wage unchanged at $543.78 a week.
Industry groups and unions took their default polarised positions on the wage freeze and the Federal Government did its best to get a foot in each camp.
While the decision itself and the reaction of the interested parties could hardly be called unexpected, the ensuing debate did raise some interesting points on how to relieve the economic burden amongst low-income earners and who should be paying.
This review was the commission’s fourth and final wage-setting decision before signing off and handing the baton to Fair Work Australia.
Job protection and assisting employment recovery were given as the main reasons for choosing not to increase the federal minimum wage.
Commission chairman Ian Harper said this year’s decision had been a “most difficult one”.
“These are uncertain times for the economy and for the Australian labour market, and in the commission’s view caution is warranted at this time in the setting of minimum wages,” Professor Harper said.
“This is not the time to risk the jobs of low-paid Australians by increasing minimum wages.”
Unions labelled the commission’s final decision as “unfair and discriminatory” and one that shifted the burden of the economic downturn onto the section of the population least able to afford it.
In real terms, the low-paid would lose income until the next wage review and it really ought to be higher income earners tightening their belts, the unions said.
The commission said that employers were entitled to pay higher than minimum wages if they could and that they ought to do so if they had the capacity.
The commission also pointed to the Federal Government’s changes to the tax and transfer system and fiscal stimulus packages as a way of delivering a “significant increase” in disposable income for lowest income households.
Industry groups have also stressed their preference for helping out the low paid via tax cuts, income support and stimulus measures rather than through a minimum wage raise.
However, the unions have countered that these very stimulus measures will now be undermined by the real income losses that the wage freeze will impose on the low-paid.
The Federal Government said the decision was “disappointing” and that it had supported a “considered rise” in the minimum wage, despite economic conditions.
However, the government said it recognised that the decision was made in “the most challenging environment to confront a minimum wage-setting authority in decades”.
So, are any of your organisations taking up the AFPC’s suggestion of voluntary pay rises for the minimum wage earners, Can any organisation afford it?
And what is the best way of relieving economic burden on the poor? Employer-led measures such as wage rises or taxpayer-funded (ultimately) action such as stimulus payments and other support measures? Or something else?