Low wage growth in Australia could have election impact Low wage growth in Australia could have election impact

Low wage growth in Australia could have election impact
24 Aug 2018

Only one in five Australian workers say they had a big enough pay rise over the last year to cover increases in the cost of living, with almost half receiving no increase at all.

The ReachTel poll, commissioned by the Australian Council of Trade Unions (ACTU), suggested that the majority of voters have noticed record-low wage growth and rate it as a significant political issue. The opposition Labor party is gearing up to make sluggish wage growth a key election matter, signalling it wants to change the way the minimum wage is set and prevent external hiring being used to undercut the earnings of permanent employees.

Almost half (47.6%) of survey respondents said they had received no salary increase at all. A further 32.9% had got one “but not enough to cover my cost of living”, while 19.5% benefitted from “a pay rise that covered my costs of living”.

When asked how significant a determinant low wage growth was in how they would vote, 28.2% said it was the top issue. A further 54% described it as “important but not the top issue”, while 17.9% believed it was not important.

Wages in Australia have stagnated over recent years, growing only 2.1% over the last year, up from a record low of 1.9% the year before. The latest figures from the Australian Bureau of Statistics showed that the cost of living for working households had increased by 2.3% in the year ending June 2018, while overall inflation was at 2.1%.

Workers in education, financial services and healthcare did better than most, but none got close to 3%, a pay rise that would have been the norm five years ago. Retail workers struggled most, seeing a mere 1.5% increase in their pay packet, according to the The Canberra Times

ACTU secretary Sally McManus told The Guardian: "Working people and their families are struggling to keep their heads above water. The cost of living is going up and people are struggling. We need to change the rules so that fair pay rises can meet the rising cost of living."

The ACTU has also called for an end to the current system of enterprise bargaining, which permits strike action relating to workplace pay deals only in favour of introducing a mix of options, including industry-wide pay deals. 

In February, Philip Lowe the governor of the Reserve Bank of Australia, asked employers to lift wages in order to “boost household incomes and create a stronger sense of shared prosperity”. But despite the plea, a survey by law firm Herbert Smith Freehills found that more than half of major employers are more likely to freeze employees’ wages or offer below-inflation pay rises that amount to a cut in real terms.

In June, the country’s Fair Work Commission increased the national minimum wage by 3.5%, taking it to AUS$18.93 (US$13.75) per hour, which was still below union demands for a 7.2% boost. But treasurer Scott Morrison has argued that, although wages have lagged behind economy-wide growth lately, pay growth is expected to return to normal.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER ARTICLES THAT MAY INTEREST YOU

Australia's tax system unveiled

Tax Justice Network Australia reveals country's worst tax dodger

Australia loses AUS$8bn annually in undeclared income tax

 

 

Only one in five Australian workers say they had a big enough pay rise over the last year to cover increases in the cost of living, with almost half receiving no increase at all.

The ReachTel poll, commissioned by the Australian Council of Trade Unions (ACTU), suggested that the majority of voters have noticed record-low wage growth and rate it as a significant political issue. The opposition Labor party is gearing up to make sluggish wage growth a key election matter, signalling it wants to change the way the minimum wage is set and prevent external hiring being used to undercut the earnings of permanent employees.

Almost half (47.6%) of survey respondents said they had received no salary increase at all. A further 32.9% had got one “but not enough to cover my cost of living”, while 19.5% benefitted from “a pay rise that covered my costs of living”.

When asked how significant a determinant low wage growth was in how they would vote, 28.2% said it was the top issue. A further 54% described it as “important but not the top issue”, while 17.9% believed it was not important.

Wages in Australia have stagnated over recent years, growing only 2.1% over the last year, up from a record low of 1.9% the year before. The latest figures from the Australian Bureau of Statistics showed that the cost of living for working households had increased by 2.3% in the year ending June 2018, while overall inflation was at 2.1%.

Workers in education, financial services and healthcare did better than most, but none got close to 3%, a pay rise that would have been the norm five years ago. Retail workers struggled most, seeing a mere 1.5% increase in their pay packet, according to the The Canberra Times

ACTU secretary Sally McManus told The Guardian: "Working people and their families are struggling to keep their heads above water. The cost of living is going up and people are struggling. We need to change the rules so that fair pay rises can meet the rising cost of living."

The ACTU has also called for an end to the current system of enterprise bargaining, which permits strike action relating to workplace pay deals only in favour of introducing a mix of options, including industry-wide pay deals. 

In February, Philip Lowe the governor of the Reserve Bank of Australia, asked employers to lift wages in order to “boost household incomes and create a stronger sense of shared prosperity”. But despite the plea, a survey by law firm Herbert Smith Freehills found that more than half of major employers are more likely to freeze employees’ wages or offer below-inflation pay rises that amount to a cut in real terms.

In June, the country’s Fair Work Commission increased the national minimum wage by 3.5%, taking it to AUS$18.93 (US$13.75) per hour, which was still below union demands for a 7.2% boost. But treasurer Scott Morrison has argued that, although wages have lagged behind economy-wide growth lately, pay growth is expected to return to normal.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER ARTICLES THAT MAY INTEREST YOU

Australia's tax system unveiled

Tax Justice Network Australia reveals country's worst tax dodger

Australia loses AUS$8bn annually in undeclared income tax

 

 

Leave a Reply

All blog comments are checked prior to publishing