What is the issue?
After nearly a decade of wage stagnation and real wage falls during the pandemic, the government is forecasting a tight employment market that will finally drive wages growth above 3% — a level unseen since before 2013.
Why is it an issue so far?
Labor argues that the government has deliberately suppressed wages growth to benefit business, and has committed to push for stronger wages growth if elected. In an environment of higher inflation, a lack of strong wages growth will see continuing falls in real wages, at the same time as households with mortgages face rising interest rates as the Reserve Bank responds to inflation.
What are the parties saying and offering?
The government forecasts wages growth to rise from 2.75% this year to 3.25% in 2022-23 and 2023-24, rising to 3.5% after that. If the budget forecasts are correct, real wages growth before tax will not reach 1% annually until 2025. The Coalition also intends to rapidly return to high levels of temporary migration to meet employer demands for foreign labour. Labor is committed to pursuing higher productivity, improving wages in the gig economy and supporting annual minimum wage increases by the Fair Work Commission.
What’s up for discussion?
The one big lever the Commonwealth has for increasing wages growth is that it is the biggest employer in the country. The Coalition has curbed public service wages growth since it came to office and used the pandemic to impose an ongoing ban on pay rises above the level of private sector wages growth. Labor has made no commitments to increase Australian Public Service (APS) pay, saying instead “the inflexible wage cap and pegging policies deny APS workers their right to seek improvements for improved performance and outcomes” — signalling that higher wages growth in the public sector will only be driven by higher productivity.
Other major impediments to wages growth — such as corporate power and an industrial relations system tilted against workers and unions — also do not figure in Labor’s reform agenda. Temporary migration, which has played a significant role in wage stagnation, is being targeted by Labor. Opposition home affairs spokeswoman Kristina Keneally has called it “a path to becoming a guest worker nation”, but the opposition has yet to detail its planned reforms, beyond saying it will favour permanent over temporary migration.
Why, Bernard, would anyone believe the government’s forecast for wages growth when every forecast since 2013 has been wrong on the optimistic side?
Good article BK. This is really what is important for the vast majority of Australians. Not niche issues or identity politics. Most Australians over the last 8 years have had their wages go backwards in real terms. Why hasn’t Labor won already?! And every Treasury forecast has been wrong on this. I hope Labor sacks the boffins that have messed it up for us of they get in. Otherwise we are in for real wage cuts of a substantial nature and the influx of migrants will confirm this state of affairs.
Labor can do something. Not just because they are the country’s largest employer. The Federal Government can constitute and legislate for the abolition of the FWC and reinstate an industrial and arbitration commission with legal powers. At the moment the FWA (read WorkChoices lite) provides for punitive measures for industrial action that hasn’t gone through protracted legal proceedings already and restricts the sort of measures that can be used by unions to force employer to bargain. It is not collective bargaining we have. We have EAs but they are really individual contracts in disguise and provide for so called productivity improvements which never happen because these gains are technologically based and qualitatively based – the preserve of managerial oversight. All they are, are the withdrawal of previous benefits and conditions like allowances, shift penalties or reductions in shift penalties and leave loadings, staffing reductions, etc. Screwing working people. Doing more with less while amassing profits and this goes for small business as well.
I have no faith in Albanese. He’s as weak as Shorten only less dodgy.
Neither has ever had an original thought or could think on their feet.
Once the morning’s tape of talking points implanted by handlers in their empty skulls runs out, they might as well go home until the next focus grouped nonsense is imprinted.
Vote Liberal, vote for poverty.
The handlers must be pretty dim. Albo must sharpen his message and think for himself.
Think? For himself?
What, break the habit of a lifetime in the backroom of politics?
The 3 per cent figure is an out and out lie. Because the LNP Government have no taste for higher wages, no policies that would deliver that and, in fact, the cheap labour heading our way with the borders reopened works directly against that.
ABC radio interviewed some economics professor, a supposed expert on wages, today who, when asked about the lack of wages growth, waffled on about how it’s because of lack of productivity, but then he couldn’t understand why with record employment figures there was so little movement in wages.
Hello! Record corporate profits!? Utterly meaningless unemployment figures! Powerless, gutless unions! Govts that don’t give a sh*t!
On another Crikey topic I was referred to the ALP National Platform. It is prescient for the discussion on wage rises and Labor’s approach to the issue. The ALP Platform mentions real wages 3 times in its 157 page length and offers vague support where the government makes a case to the FWC for a wage rise. Hardly ensuring real wage rises at all. If Labor fails to get back in the union movement will have to go it alone without ALP backing. I agree with Jamie Parker when he said once about ALP politics and branch politicking that it is not the unions which are bad for Labor as has been put about so often for generations, particularly since the 1970s, but rather it is the Labor party which is bad for unions. If Labor does get in there is no guarantee at all that real wage rises will occur. There is no mechanism for that to occur. In the current climate if you want a wage rise you have to ask your boss and if he says no, you had better have a better job lined up. This is the only way under the current system for real wage growth. Change jobs. There is no court or tribunal to compel the employer to pay more or provide you with better conditions of work. They can just say no and do whatever they damn well like. I have changed jobs over the years to my current one and I know of no previous employer who appreciated me changing jobs for something better. They hate you for it. I joined a public service job, just to rub it in to the tories who tune in to Crikey, 27 years ago and managed to work mostly shift which boosts income by around 33% on top of base level depending upon grade and seniority and which was until recently mainly unionised. Unions lead the way for negotiations which were satisfactory until 2014. Without shift penalties and overtime such as it was for 4 or so years I wouldn’t have prospered to the small extent I have. Unions are whittled away in my agency due to staffing with new recruits and casuals, most of whom are young – less than 40 – and are desperate. I can only surmise what it is like for workers facing the triple whammy with no union, no shift penalties and employers and management who are more unscrupulous. Remember these employers don’t have to pay you a wage rise and the bad ones will sack you for asking. Without a court or tribunal you are on your own. Individual contracts should be abolished unless they exceed the relevant award in wages and conditions. EA should be bargained in good faith but the employer is under no obligation to do so and faces no penalties for not doing so. The workplaces of today are full of scabs. This is reality. Labor is ruining the union movement and working people by not advocating for them.
As I said, the ALP Policy Platform 2021 mentions real wages 3 times but mentions migration and immigration 66 times. This demonstrates where Labor’s priorities are going forward. They have given up on unions and working people and are orienting themselves towards target migrant groups and immigrants broadly speaking simultaneously.
Metal Guru. I’m sure you have facts at your back and call, ideas pouring forth, plenty to offer, but until you insert commas and paragraphs, I’m afraid that many of us aren’t prepared to toil through your posts.
I definitely am not setting out to insult you, but your posts are too involved and come across as rambling which is not at all what you mean to imply.