A new report from the Australian Council of Trade Unions (ACTU) claims that a 10.3% increase in workers’ productivity since the Coalition government won office in 2013 has not been reflected in wages growth.
The peak union body says the average worker would have been $10,000 better off if real wages had kept pace with productivity under the Coalition. It contends that the Coalition has deliberately suppressed wages via its policies, including the promotion of insecure work, allowing wage theft, and using legal loopholes to circumvent enterprise bargaining agreements.
Below is the summary the report with some key charts added:
There are 1935 words left in this subscriber-only article.
Over the entire term of this Morrison government, real wages have fallen by 2.3%. That’s the first time this century that workers’ real incomes are lower as they go to the polls, than they were the last time they voted…
We have had almost a decade of flatlining real wages since the Coalition Government came to power in 2013. Wages also aren’t keeping up with workers’ ability to produce more goods and services (labour productivity growth). Since the Coalition came to power, private sector real wages have risen by just 1.6%, while labour productivity grew more than 6 times faster than real wages (10.3%).
A worker on average would have earned $10,000 more since 2013 if real wages had kept up with productivity…
The Government’s own Finance Minister admitted in 2019 that low wage growth was a “deliberate design feature of our economic architecture”.
The Abbott/Turnbull/Morrison Government has consistently entrenched low wage growth by:
Promoting insecure work and the rise of underemployment…
Failing to advocate for real wage rises for 1 in 4 workers…
Capping Commonwealth public sector pay…
Failing to act on the gender pay gap…
Undermining collective bargaining…
Failing to act on wage theft…
Pretending wages growth is just around the corner…
Pretending that fair wage rises cause inflation…
Overseeing the greatest share of national income going to business and not workers…
Low wages are not inevitable. A range of simple and practical measures would turn around our lost decade of wage growth and give Australians the pay rise they deserve. A Federal Government that cared could:
Close the loopholes in the law that let employers turn permanent jobs into insecure ones.
Support at least a 5% increase in minimum and Award wages this year to make progress towards all workers earning a living wage.
Remove caps on APS wages and let Commonwealth public sector workers effectively bargain for fair wages.
Scrap the Morrison Government’s plan to let employers cut employee pay and conditions under Enterprise Agreements, and close the legal loopholes that let employers tear them up, stripping workers’ pay, rights, and conditions.
Pass laws that remove the barriers that are preventing women from achieving equal pay
Support Aged Care workers in their case for a $5 an hour work value pay rise.
Crack down on wage theft by passing laws to let a worker quickly and easily chase up stolen wages and super.
Start publicly backing fair pay rises that let all workers receive their fair share of labour productivity growth.
But on all of these measures Morrison is missing in action on wages.
Curiously, the ACTU has failed to mention the important role played by mass immigration in lowering wages. This is odd given ACTU secretary Sally McManus raised this very issue on 3AW in late March 2022:
ACTU secretary Sally McManus says the drop in immigration is “certainly one big part” of the low unemployment rate, and she’s not keen to see things return to the pre-pandemic status quo.
“A lot of employers got very used to how it was back in 2019 and before, where they weren’t giving pay rises and where unfortunately in some parts of the economy they built in wage theft,” she told Ross and Russel.
Ms McManus wants to see employers paying locals more and training up local people, rather than relying on an “endless stream” of foreign workers.
She’s calling for major reform of the system for foreign worker recruitment.
“What’s not a good thing is an uncapped open-ended system where employers can just put an ad on Facebook on low wages and say ‘Sorry, couldn’t get any locals’ and then they can bring in workers from overseas who will work under those conditions,” Ms McManus said.
“I think this is a big opportunity for us as a country to readjust all of this … and stop ripping off migrant workers.”
A previous ACTU report also pointed the finger directly at temporary migration for lowering Australian wages:
The relatively recent availability of a large and vulnerable pool of temporary migrant workers has undoubtedly contributed to current record low levels of wages growth and a growing reluctance by employers to train local workers…
There have been a range of abuses uncovered which have clearly shown that the entire system is broken. From 7-11 and Domino’s to agriculture, construction, food processing to Coles, Dominos and Caltex, it is clear that the abuses occur in a number of visa classes whether they be students, working holiday makers or visa workers in skilled occupations…
Migration intermediaries have a vested interest in inflating demand. Australia has created a massive industry with many migration agents outside of our jurisdiction who cannot be prosecuted for breaches. This mushrooming “migration industry”- a complex and transnational web of agents, lawyers, labour recruiters, accommodation brokers and loan sharks – is currently largely unregulated.
The growth of labour hire operators alongside the migration industry has led to companies seeking to sell temporary migrant workers to employers, creating a fake “Job Network” which preferences temporary workers over Australians…
Labour ‘shortages’ should first be addressed through a readjustment in the price of labour – increased wages. An inability to find local workers to work at a specified wage rate, coupled with an unwillingness to offer higher wages, does not necessarily imply a skill shortage – particularly where local workers would be willing and able to work if the wage rate was lifted. This differs from a skill shortage in which there are simply not enough people with a particular skill to meet demand.
Why have the censors at the ACTU omitted excessive levels of immigration from the discussion around wages?
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also Chief Economist and co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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