The Reserve Bank continues to emphasise wage growth, or lack thereof, in its economic commentary. In its minutes from the September board meeting, released earlier this week, it commented on low wages growth both here and overseas, while still maintaining “a gradual increase in growth in wages and inflation was expected as the spare capacity in the labour market was reduced and the economy continued to strengthen, supported by the low level of interest rates.”
That’s not what’s happened overseas, however — low unemployment and low wages growth have been occurring simultaneously, in defiance of economic modelling, possibly because globalisation is forcing western workers to compete with workers in developing countries, possibly because (neoliberals say) of automation, possibly because trade unions and industrial relations frameworks have been so trashed by governments, especially in Anglophone countries, that they’re not able to drive stronger wages growth.
While we wait to see what the next few quarters will bring on wages, it’s possible to see exactly the kind of mindset that has driven down wages and which sees any wages growth of any kind as a kind of manifest evil requiring relentless attack. This week, Innes Willox of the Australian Industry Group railed at the Fair Work Commission’s rejection of agreements that allowed fast-food retailers to make some employees worse off by moving remuneration for penalty rates around. The system was, he declared, “unworkable”. He was referring to agreements struck between fast food giants like McDonalds and key Labor donor the Shop Assistants Union (SDA) which made thousands of workers worse off even as the SDA purported to campaign against penalty rate cuts.
To put this in context: at a time when Australian private sector workers are enduring real wage cuts, a major employer group is complaining that the Fair Work Commission — which early this year slashed penalty rates for the retail sector — is not giving employers enough flexibility to cut workers’ pay. Since 2009, retail (and hospitality) has seen the weakest wages growth of any major sector: according to ABS figures, the wage price index in retail has grown just 22.6 points while most major sectors have grown between 25 and 30 percentage points.
But for employers, the problem is that they haven’t been able to slash wages still further. And The Australian is cheering them on. It takes a special kind of thinking — one created by decades of unthinking application of neoliberal economics — to look at workers becoming poorer and decide that what’s really needed is to make them poorer still — and in particular, targeting an industry like retail where the many of our lowest-paid workers try to eke out a living.
Wages growth might turn around, as the RBA hopes. But people like Innes Willox and the implacable enemies of workers at The Australian will do their damndest to make sure it won’t happen.
Class Warfare : we plebs are supposed to “pull for Oz” – while employers pull for themselves?
[Meanwhile (in a parallel universe – not far away) it’s going to be interesting, activist investors urging BHP to dump the politically hot Minerals Council of Oz?]
What will they do when they win the race to the bottom and nobody has the means to buy the crap on offer?