above: Anthony Albanese wants Wages to at least Keep Pace with Inflation
Dr Tristan
Ewins
Anthony Albanese
stands besieged for suggesting a minimum wage increase which keeps pace with
inflation. Specifically, that is 5.1% This would raise full time wages by
just $39.40 a week – less than a dollar an hour. Businesses are claiming such a move would
drive them to the wall and fuel inflation.
But since the 1970s labour’s
share of the economy has fallen by over 10 per cent, from 58.4 per cent to
47.1 per cent: or $16,800 a year for the average worker. Especially ; why is it that the Conservatives
believe it is the job of the country’s lowest paid to pay the price for
inflation when many businesses are experiencing spiralling profits? If wages cannot even keep pace with inflation,
at what point can the structural inequities in the country’s labour market be
addressed?
It is
true that higher wages may have some impact on inflation. There are areas where increased costs will at
least in part be passed on to consumers. But this is a false economy based on
the exploitation of the poorest workers.
It suggests a policy of drifting towards a US style labour market where
there is a large class of working poor who can barely keep their heads above
water. Fear of falling into the working
poor disciplines the so-called ‘middle class’.
And threat of homelessness and destitution disciplines the working poor
themselves. This is the trajectory the Conservatives would take us down.
But
arguably in the name of fairness there must be a ‘structural correction’ for low-paid
workers at some time or another. This may
have a small, temporary impact on inflation ; but it is necessary if the most
exploited are to survive in dignity and make ends meet. The prosperity of high and middle income
earners cannot be based upon the exploitation of a class of working poor.
Also there are other ways of dealing with inflation. Raising taxation (for those who can afford it) could take the heat out of
the economy without depending on the working poor to pay the price. This is a better, fairer way of dealing with
inflation. But some inflation is
inevitable on account of international factors ; and we should share the burden
of dealing with this across society and economy.
At the
end of the day an even larger correction is justified. That is: to restore
labour’s share of the economy, and the grow the social wage and welfare state
to support all Australians. This is necessary as some problems are best faced collectively ; and also the labour market will never deliver full distributive justice to all workers. All workers deserve
support ; including those who find it hard to organise ; or who face structural
constraints to wage increases. Because of the way the Australian economy is now
structured all this is no easy task. The
process could begin with claims for collective capital share in lieu of greatly
increased wage levels. This is a process
that could be led by unions ; who could target areas that are not overly
susceptible to capital flight. Also low-paid
workers could be assisted by a recission of secondary boycott bans where
secondary boycotts are taken by well-organised workers in support of workers
with little bargaining power ; and where such action can be shown to be being
taken in good faith.
Albanese has promised action on wages. But even committing to matching inflation does
not compensate for falling wages over the course of the last decade and more. Though Labor’s housing
policy – which involves the government taking up to 40 per cent equity in
families’ houses – will put home ownership within reach for many who may
otherwise have felt the situation hopeless. As
interest rates increase the price of properties will probably fall – a ‘double
edged sword’ that – while perhaps necessary – will leave many Australians looking
poorer on paper.
One area
where Albanese has been unequivocal has been his support for a 25 per cent rise
in the wages of Aged Care workers. This
is one of many areas requiring a ‘structural correction’ ; both to deliver wage
justice ; and also to improve care, and retain workers in the industry. Given the taxing and skilled nature of the
work there should be a minimum wage of at least $30/hour here. This is more
than the existing claim.
In the
final analysis the economy makes so much wealth ; and the question is one of distribution,
as well as higher productivity ; and industry policy encouraging high wage
industries. Increasing the size of the cake is good – but does not solve all
problems. At some point we need to confront the question of who gets what share
of the cake ; and this will require redistribution. Sometimes it’s possible to
have ‘win-win’ – but not always. We
cannot become a US style economy where workers are disciplined by fear of destitution
; and where the living standards of a so-called ‘middle-class’ depend on the
exploitation of the working poor.