The AFR reports a growing trend for unions to seek wage rises in line with the inflation rate in enterprise bargaining negotiations.
In some cases, wage increases are linked to future CPI rates.
Optus, Visy and meat processor Teys are among the companies that have agreed to pay rises of more than 7% via CPI guarantees in union deals.
Brent Ferguson from the Australian Industry Group contends that linking wage rises to the CPI is “unworkable and unsustainable”.
“We are currently seeing several unions make claims for increases well in excess of the level of CPI increases”, Ferguson said, and urged employers to reassess approaches to CPI guarantees.
“Wage negotiations are complex and need to account for the individual circumstances of each business,” he said. “A one size fits all approach of tying increases to CPI movements is both unworkable and unsustainable”.
ACTU assistant secretary, Liam O’Brien, countered saying “big business profits are going through the roof while workers are barely keeping their heads above water”.
The latest enterprise agreement data shows there has been no “breakout” in wages:
By contrast, the nation’s CEOs are making out like bandits enjoying pay rises of double the rate of inflation.
McGuirk Management Consultants for the Governance Institute of Australia surveyed 1,167 boards from across the public, private and not-for-profit sectors, and included 226 share market-listed companies.
They found that the nation’s big business leaders received an average 15% base pay rise.
Among the significant findings were that chief executives of ASX-listed businesses received an average 15% base salary increase, while those with the position of managing director received a 14% pay increase.
Those in charge of one of the country’s top 200 enterprises had their average fixed compensation rise by 19%.
Research released this month by the OECD shows that profits have played more than twice the role that wages have played in driving up Australian inflation over the past few quarters:
Source: OECD
Aggregate unit profits have also risen far more quickly than inflation over the pandemic, whereas wages have lagged inflation:
In reality, it is profiteering by corporations boosting prices to fatten their margins that is driving Australia’s inflation, not workers, who are seeing the fastest decline in real wages on record.
