The fact that several retail associations wanted either a zero real wage rise or a real wage cut on minimum wage employees has attracted some media attention in relation to the Fair Work Commission’s current minimum wage inquiry; less so their reasons. One particularly important reason that retailers want no wage rises is that consumers aren’t spending.
According go the National Retail Association (#unhelpfulacronym: NRA, wants a 0% rise), “recent data from the Australian Bureau of Statistics (ABS) show that the sector suffered a 0.5 per cent fall (seasonally adjusted) during the traditionally busy month of December and the figures for January 2018 again highlighted poor sales growth.”
And the Australian Retailers Association (wants 1.9% i.e. CPI): “Retail as an industry is already struggling, with year-on-year revenue growth dropping significantly, partialy [sic] due to weak consumer confidence… When consumer confidence is low, retail trade suffers, and the absence of robust consumer confidence levels in recent times has been detrimental to the viability of the sector.”
And Master Grocers Australia (wants 1.1% rise): “The domestic retail sales market remains slow moving.”
At least the ARA doesn’t want workers to have a wage cut. You can only wonder at the mindset of the NRA and MGA, who think retail sales are going to magically surge off the back of further real wage cuts for low-income earners, who spend more of their income than anyone else. Maybe they think every other sector but themselves should be made to pay higher wages?
Meantime the government’s submission runs to over 80 pages without recommending any wage rise, which the cynical could interpret as a de facto recommendation for a 0% rise. To the government’s credit, however, at least the submission avoids the controversy of last year’s effort, in which the government argued a minimum wage rise would simply be wasted on women and young people. There is, however, the problem of trying to keep your story straight in different contexts. As part of its advocacy of a tax windfall for multinationals, the government insists we desperately need to boost investment, and a tax cut is the only way to do that. Only, its submission says
Business investment is forecast to grow by 2 per cent in 2017-18 and 3 per cent in 2018-19. This recovery follows four years of declining investment, where falling mining investment weighed on overall spending. Mining investment is expected to continue to fall over the forecast horizon as large resource projects are finalised, but the drag on economic growth is near complete. In contrast, non-mining business investment exceeded expectations in 2016-17 and is forecast to increase by 5 per cent in both 2017-18 and 2018-19. This ongoing improvement is consistent with more positive business conditions and surveyed non-mining capital expenditure intentions over the past year.
And all despite the apparent deterrent value of our company tax rate! Oh, and there’s this:
Business profits have increased by 5.0 per cent over the past year, with mining profits accounting for just under half of this growth on the back of resurgent commodity prices… Profits have also increased in the non-mining economy, up 3.8 per cent in 2017.
Remember Scott Morrison insisting wages growth would follow rising profits? So far, the only wages growth has been in government-controlled health and education. So… not so much.
Speaking to a local cafe manager in Prahran they commented that takings are way down and continue to slide as people are cutting back on discretionary spending – the first thing to go when there is less money around.
People are either staying away or only grabbing a coffee and not staying for brunch or lunch.
They have already had to cut shifts or lay off staff.
The reason? Wages are low and expenses are rising in households.
The cafe manager cannot believe the stupidity of the various industry groups.
And these so called industry leaders want to hold back wage growth at or below CPI?
Moronic. Simply moronic
how stupid are the conservatives and their retail and small business mates, the only way for a spending resurgence is by increasing incomes, this generates higher sales more jobs, more tax paid by both workers and companies, cutting incomes is like cutting your leg off because you have a sore toe, the same goes for labor`s stupid attack on small superannuate`s, slashing their income has the same economic effect, you might notice neither shorten or bowen suggested doing anything about the politicians rorting of their super at taxpayers expense, all one cosy little nest of vipers when it comes to their corrupt little deals.
Admitting that increasing wages drives spending and economic growth would be tantamount to admitting that increased government spending also drives economic growth, and that the holy grail of tax cuts and trickle down was not the only or even the right path to growth.
immediate $30 a week rise in dole needed. both so people can actually exist on it and as an immediately effective retail economy stimulus. no brainer
Indexing the highest paid to the lowest paid might frighten the horses.
Yes; maybe if CEOs weren’t given 200 x average worker’s remuneration, some of the companies’ profits could go to wage increases, and the workers would have more to spend on brunches, etc., and the small businesses would be able to employ more staff who would pay taxes and ameliorate the perpetual “budget emergency”, so that we wouldn’t have to cut funding for welfare services …