Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.

 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate


On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.


RSS 2.0

Wages decision a ‘kick in the guts’ for the most vulnerable workers

By Tristan Ewins - posted Wednesday, 22 July 2009

The other day - on July 7 - the final act of Australia’s so-called “Fair Pay Commission” left a bitter aftertaste for many.

The Commission has decided not to raise the minimum wage rate above its current level of just under $544 a week (an hourly rate at $14.31), with a consequence that, due to inflation, the value of wages has fallen in real terms.

According to the ACTU, “the average award worker will lose about $16 a week until the next wage decision is due in July 2010”.


ABC News reported that “around 1.3 million” people will be affected, and that both unions and the government were “disappointed”.

Employers had argued that a “$3-a-week increase in disposable incomes through … proposed tax cut[s]” would compensate workers for the wage freeze. ACTU President Sharan Burrow, responded by labelling such claims "nonsense and insulting".

Continuing, Burrow argued that the shift would “certainly cost jobs if [we] see wage deflation in Australia”.

Burrow, here, is arguing on solid ground. Wage cuts which attack the disposable income of workers are bound to have a negative impact on aggregate demand and consumer confidence. This in turn would certainly cost jobs.

Meanwhile, Frank Quinlan of Catholic Services Australia's has identified the reasoning of the Fair Pay Commission as being inconsistent and hypocritical:

On the one hand they have argued that when there is inflationary pressure, low paid workers wages need to be controlled. On the other hand they have argued that when there is recessionary pressure, low paid workers wages need to be controlled. So it is very difficult for me to understand the circumstances under which this Fair Pay Commission would actually deem it fair to increase low paid workers wages.


Australia’s most vulnerable workers should not be made to “bear the burden” of the response to the recession. Here we refer to cleaners, child care workers, retail workers, hospitality workers, call centre workers and others.

Arguments for suppressing these people’s wages are just another take on the discredited idea that labour markets should always be flexible downwards in order to “clear”.

This idea - to clarify - holds that wages should be driven down by market forces (to reach “equilibrium”) and that the alternative to this is unemployment. Against this it could be argued that there are many areas - for instance cleaning - where demand would hold steady regardless of fair wage standards. Another argument is that fair wage standards would not impact negatively on overall demand but rather on wealth distribution and patterns of consumption.

  1. Pages:
  2. Page 1
  3. 2
  4. All

Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

10 posts so far.

Share this:
reddit this reddit thisbookmark with Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Tristan Ewins has a PhD and is a freelance writer, qualified teacher and social commentator based in Melbourne, Australia. He is also a long-time member of the Socialist Left of the Australian Labor Party (ALP). He blogs at Left Focus, ALP Socialist Left Forum and the Movement for a Democratic Mixed Economy.

Other articles by this Author

All articles by Tristan Ewins

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Tristan Ewins
Article Tools
Comment 10 comments
Print Printable version
Subscribe Subscribe
Email Email a friend

About Us Search Discuss Feedback Legals Privacy