Aussie employers back further real wage cuts

By Leith van Onselen

A survey of employers by law firm Herbert Smith Freehills (HSF) shows that around 60% of employers will push for a wage freeze or only a modest increase in wages. From The AFR:

The firm’s bargaining survey of about 60 key clients, including large private sector companies across construction, infrastructure, mining, retail and healthcare industries, found that 60 per cent would look at “wage freezes or only nominal wage increases”…

HSF industrial relations partner, Rohan Doyle, said employers were still responding to an environment of flat wages.

“Competitors aren’t lifting wages and there’s no need or desire for others to do so – and you obviously don’t want to be out of step with the market on those things because you’re at a competitive disadvantage”…

Employer sentiments on wage restraint also align with observations from Australian Council of Trade Unions secretary Sally McManus, who disagreed on Sunday with Dr Lowe’s statements of a wage recovery.

“We haven’t seen that change yet,” she told ABC’s Insiders. “And if there is a change, it must be a very slight one. We are not seeing that in bargaining nor on the ground.”

So much for the hoped recovery in wages growth. Instead, it looks like Australian employee compensation – which has already fallen by 4.2% in real terms since March 2012, despite solid rises in labour productivity – will remain stuck in the gutter:

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  1. you obviously don’t want to be out of step with the market on those things because you’re at a competitive disadvantage

    Uh, what about firms that steal wages? How is that fair to firms that do comply with the law?

    Nice graph. Show that wages have been falling since 2011 but the electorate only wants immigration cuts due to overcrowded trains and not to get pre-Gillard wages!

  2. cycledseasoning

    The shift back to wages growth ain’t ever coming.

    The neolibs have a clear (unstated) policy agenda to reduce real wages. It fits fundamentally with their world view of increasing the competitiveness of Australia (which is a noble enough
    and perhaps vital agenda, but the tactics available to achieve that end do not have to include impoverishing your workforce), and the whole nobody owes anybody a living trope, not government and certaintly not you employer. This world view is all too easy to enforce when you’re: able to control the level of new demand for jobs via the immigration policy and import whole cohort of workers untethered to any historical or cultural expectations of workplace conditions, rights, bargaining of whathaveyou, and you can concurrently lower the expectations of the next generation of university graduates by increasing their supply to such levels that they are literally fighting each other for the most menial of jobs they could have hitherto been eligible for with just a school leaver’s certificate.

    The neo Libs don’t want wages growth, they want insecure and compliant employees. If the RBA ever wants to raise rates, it will end up having to look through the lack of wages growth and focus on other factors, which is entirely possible.

    • “This world view is all too easy to enforce”

      It sure is while media personalities get $1m a year to sell the rort.

      ABC is stacked with lefties discussing everything but the future of Australians.

      LNP, Labor and Greens are big Australia.

      Our offspring are doomed. Well and truly.

    • competitiveness of Australia

      They would smash the price of industrial land if they were serious. But they do what right wing pricks online demand – “wages in AUS should be the same as wages in Indonesia but electricity prices in AUS should not be lowered”.

      They also want more and more voters to sleep in their cars due to the real estate bubble.

      They also have the fake Greens on their side when it comes to raising taxes on petrol but not making car rego free for the poorest voters.

  3. Sally McManus calls cuts to population growth “stupid”.

    Another leftie rising to the top to fk us all over.

      • Not easily I can’t. I read it on her twitter I think in response to cuts to population growth article.

        I’ll see if I can find it.

      • Not what I saw, but here’s couple of quotes from her;

        “The federal government should cut the number of people coming to Australia on temporary work visas rather than exploiting fears about permanent migrants”

        “Whenever the Coalition are in trouble they seek to blame migrants for the problems in the economy they or big business have created. No migrant caused jobs to be casualised, contacted out or farmed out to labour hire”

        “No migrant caused jobs to be casualised, contacted out or farmed out to labour hire” …….lol. That’s how lefties think. They’re just imbeciles.

      • Thanks Ric. I reckon her comments show she favours lower immigration levels but she targets her comments to temporary work visas for political purposes rather than dealing with the real problem – i.e. the total number irrespective of which category they are in. She’s too politically correct to tackle that abuse on behalf of the workers she is supposed to be representing.

        This simply lets Shorten off the hook with his ‘big Stralya’ policies and does nothing to correct wage deflation; in fact, it meekly offers inferred support to the same ‘big-end-of-town’ government which seeks to damage her cause on a daily basis. Pathetically weak!

  4. Maybe McManus might see some improvement if she examines immigration levels (i.e. supply of labour) instead of beating around the “politically correct” bush about it.

    • We are truly in bizzaro world at the moment. Why is it even a thing that we can’t talk about immigrants stealing our jerbs? Why has our political class thrown us under the bus to favour people from other countries?

      • Bizarro it is, Timmeh, however, it’s not the ‘average stiff’ that pollies go in to bat for. They are just patsies, at the end of the day, doing the bidding of higher powers i.e. big business and assorted billionaires.

        As the old saying goes: He who has the gold makes the rules ..

  5. Yes lets have wage cuts, and a tax cut for business. To make up for lost revenue government will have to raise personal income tax rates. And then since no-one will have any money left to spend, we’ll have to import fresh new consumers from Asia.

    Until we begin to resemble Bangladesh.

  6. Jumping jack flash

    There’s still wage increases, just not for the plebs.
    There’s never been a better time to be an executive! Executive wages have never been higher.

    Executives are people too, and people have debt. Mountains of it. Those houses don’t buy themselves you know, they need debt to buy them.
    Owning mountains of debt makes everyone grabby. Cost of living pressures affect everyone, even executives. Most of them don’t live in a vacuum on their own island. They want standards of living commensurate with the amounts of debt dollars they own, just like everyone else does.

    Whoever gets first access to any potential wage increases from all the recent productivity increases gets the first bite of the pie. It just so happens that their bite is the whole pie.

    But never fear, if you take executive pay increases and average them against the stagnant pay of the plebs, on average everything is awesome. It’s not like wages are going completely backwards yet, so no problems.

    No wage increase? Crippling mountain of debt? No problem. You too can afford the lifestyle you dream of.
    Here, have some more debt, there’s still plenty around.