Unions across a range of sectors will now push for larger inflation-adjusted pay rises for their members in the wake of the latest minimum wage case.
“In the current environment, few employers can afford wage increases of 5 per cent per annum or more,” he said.
“Such wage increases would no doubt result in many more redundancies. Already, there has been a big increase in the number of calls to Ai Group’s workplace advice line about redundancy issues over the past two months.”
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said many businesses were impacted by surging energy costs, supply chain disruptions and workforce shortages. “The notion of indexing wages to inflation is economic suicide when the Reserve Bank has warned that the CPI could reach 7 per cent by the end of the year,” he said.
“Pursuing excessive wage increases across the board only risks embedding inflation.”
Unions hit back:
“Employer groups will never support pay rises. They are arguing against all available evidence against pay increases. Employers can afford it; they just do not want to pay it” [Australian Manufacturing Workers Union national secretary Steve Murphy said]…
“It is probably worth noting that the very high profit share and the continued exploding gap between profits and wage share is being better understood. This is a real issue now on the shop floor” [United Workers Union national secretary Tim Kennedy said]…
I find the business lobby’s position deplorable. For a decade they used low inflation as an excuse for low pay rises. But now that inflation has risen, they refuse to show the same energy. Funny that.
They also continually complain of labour shortages, yet refuse to lift pay to resolve said shortages. Instead, they lobby incessantly for a return to mass immigration so they can ruthlessly exploit migrant workers and suppress wages.
The truth of the matter is that Australian wage costs are cheaper than ever thanks to a decade of wage suppression amid rising labour productivity:
Australia’s real unit labour cost was 6.3% below its pre-pandemic level in the March.
In turn, wages’ share of national income has fallen to historical lows while company profits have soared to record highs:
Business have made out like bandits at the expense of Aussie workers.
If business groups are genuinely worried about inflationary pressures, they should look in the mirror at their own members’ action. Because price gouging by businesses is a far greater inflation risk than workers receiving an inflation equaling wage rise amid rising productivity after a decade of real wage stagnation.
Why should Australian workers’ real pay go backwards while businesses continue to make out like bandits enjoying booming profits? How is that fair or good for society? And if labour shortages are so serious, then why aren’t businesses prepared to lift wages to ‘meet the market’?
The propaganda coming out of the business lobby is laughable, enabled by Australia’s captured business media.
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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