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Home > News > 2018 > December > An agenda for wage reform

An agenda for wage reform

wage_flat_line.pngAn agenda to arrest Australia’s wage growth crisis has been outlined by industrial relations experts.


Released last week, The Wage Crisis in Australia: What it is and what to do about it is a compilation of 20 expert essays which seek to answer four prosaic questions: What is the wages crisis? Why is it happening? Why does it matter? And what should we do about it?


Australia is currently experiencing the slowest sustained pace of wage growth since the Great Depression. Since 2012, when adjusted for inflation, wages have not grown at all.


As a result of poor wages growth, consumer spending is stagnating, household debt is rising, taxation revenue is falling and inflation of the economy is supressed.


Contributors to the book posit “market forces” alone will be inadequate in addressing the wage crisis and “corrective action” will be essential to solving the problem.


The experts’ solutions


End goverment wage suppression

As the largest individual employer is our economy, the book posits that government should play a greater role in promoting wage growth – particularly through abolishing caps on public sector wage increases and providing funding to public and community services which incorporates wage rises.


Revitalise collective bargaining

One of the most enduring themes in the book is the need to enhance workers’ collective power. The erosion of workers’ bargaining power through limitations on collective bargaining and the right to strike, as well as restrictions on multi-employer and sector bargaining have been highlighted as key barriers to wages growth.


Strengthen the minimum wage

The experts propose elevating the minimum wage to a ‘living wage’ set at 60% of the median wage, empowering the Fair Work Commission to set medium-term wage targets and amend ‘equal remuneration’ provisions to support claims made by workers in feminised industries.


Avoid outsourcing employment responsibilities

The endemic use of ‘freelancers’ and ‘independent contractors’ by employers in order to avoid paying minimum wages and workplace entitlements is called out in the book. To overcome erosion of employment standards, the experts propose broadening the definition of ‘employee’ under the Fair Work Act and holding companies responsible for breaches of workplace laws by their subsidiaries.


Improve compliance

Lastly, the book notes the importance of ensuring workplace laws are complied with. Increasing and sustaining funding to institutions such as the Fair Work Ombudsman and the Australian Taxation Office could increase regulatory scrutiny on employers. Recent reports have noted that wage theft by employers costs workers billions every year.


IEUA-QNT Assistant Secretary Brad Hayes said members had experienced the deficiencies with Australia’s industrial landscape first-hand.


“As workers wait for wage rises which seem increasingly unlikely to appear, this report is a timely notice to government that industrial laws need to change,” Mr Hayes said.


“Whether it is the difficulty in getting employers to the bargaining table, the onerous process of taking protected action, the lack of access to independent arbitration, or the inability to convert to a secure job, our members understand the cost of industrial laws which favour employers.”


Mr Hayes said unions had already joined the push to overhaul Australia’s industrial landscape through the Change The Rules campaign.


“The Change The Rules campaign is a driving force to address these laws and return a fair share of power back to workers.


“Union members have been rallying in the largest numbers seen in a decade and will continue to take action until these laws are changed.”


Download a free electronic copy of The Wage Crisis in Australia: What it is and what to do about it via the University of Adelaide Press website.


Find out more about the Change The Rules campaign at www.changetherules.org.au

Authorised by Terry Burke, Independent Education Union of Australia – Queensland & Northern Territory Branch, Brisbane.