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Let’s not forget about who the minimum wage is for

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By Dave Oliver

Secretary of the ACTU

Thursday, 27 March 2014

LAST week I heard a story that reminded me in no uncertain terms why the annual minimum wage case is such an important part of the work unions do.

She’s worried about losing her insecure job and she describes her employer as ‘tough’ so I won’t use her real name.

‘Anne’ is a 67-year-old aged care assistant who still works as many shifts as she can get. After a lifetime on the job, you would think she would at least be able to live in modest comfort.

But she can’t.

Her neighbours say they can tell when Anne has visitors because that’s the only time her house is lit up. Electricity is expensive so she sleeps with the blinds raised. That way if she needs to get up in the middle of the night she can see where she’s going without flicking the switch.

Instead of buying vegetables she grows her own; it’s cheaper. But then there was low rainfall last year and tap water is expensive so much of the garden died.

Saving money dominates all her decisions and keeps her awake at night.

As does her back which aches incessantly and requires costly therapy to help her deal with the pain and allow her to continue working.

‘Anne’ still harbours the dream of home ownership

So why is she still struggling in such a manually-intensive industry often caring for people younger than herself?

Because earning just over $16 per hour isn’t much to make ends meet. And because she’s determined to have something many other minimum wage earners never get, a home of her own. In just five more years she will have paid off her modest mortgage after many years.

For those on a low wage, home ownership is a now pipedream. The minimum wage hasn’t even doubled in the past 20 years compared to a 250 per cent increase in housing prices.

WATCH: the story of the minimum wage

People like at Anne and their struggles are at the heart of the annual wage review case in the Fair Work Commission.

Australia’s lowest paid include cleaners, retail and hospitality staff, child care workers, farm labourers, and factory workers.

They aren’t victims and they’re not asking for any sort of charity. What they want and deserve is that their living standards keep up with the rest of the community. Sadly, we know that they’re falling behind.

In our submission which will be lodged with the FWC on Friday, the ACTU will call for a fair and adequate raise to the minimum wage to combat rising inequality.

A widening gap of inequality

We know the gap between low paid workers and the rest of the workforce is growing. If this is allowed to continue then life will get harder for workers such as Anne who will have to take on a second or third job, more often than not, also at low pay.

Working multiple jobs to afford the basics is moving us towards the ‘working poor’ scenario they have in the US – something Australians have made it very clear they don’t want. Australia could end up as a place where you work 38-hours a week and still not have enough money to cover your basic costs.

Australian minimum wage earners are doing okay by global standards but only just and worryingly the Abbott Government has made its intentions clear. What’s best for workers is very low on the Government’s agenda.

This will no doubt be reflected in their submission to the Fair Work Commission. But don’t let the outdated arguments fool you. Keeping the minimum wage too low isn’t good for any economy.

Internationally over 600 economists, including a number of Nobel Prize-winners, recently signed an open letter calling for the US minimum wage to be increased, saying the weight of evidence shows increases in the US minimum wage have had “little or no negative effect on the employment of minimum-wage workers” and that a rise “could have a small stimulative effect on the economy.”

As the submissions roll out this Friday and we hear high-earning employers and the Government arguing that workers need to ‘tighten their belts’, it would be good to remember they’re talking about people like Anne.


Working Life is a forum to share ideas and opinions about work and life, both light-hearted and serious. The opinions presented on Working Life are those of the author, and do not necessarily represent policies or views of the ACTU.

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Comments

  1. John Love
    Friday, 28 March, 2014 at 11:48 am · Reply

    I am a 63 year old who work 7 10 hour nights a fortnight and just earn enough to pay my mortgage and car payment and utilities. I cannot afford any luxuries and find it a struggle to save enough to go on holidays each year to Tasmania to visit family so an increase of this proportion would really ease the burden.

  2. RGG
    Friday, 28 March, 2014 at 12:19 pm · Reply

    The minimum wage decision affects many more that the lowest paid. Many awards are linked to it. If you are a casual worker, I pity you.

  3. Shane Wills
    Friday, 28 March, 2014 at 12:19 pm · Reply

    The rich get richer and the poorer get poorer. I have 4 kids and can barely afford my rent on a one bedsitter house turned into 3 rooms with walls.constantly trying to postpone or delay a bill everytime month.

  4. George Naumovski
    Friday, 28 March, 2014 at 12:49 pm · Reply

    Compared to the cost of living such as utilities/food/fuel and housing, the minimum wage is far too low. Either the cost of living gets heavily reduced or the minimum wage be doubled!

  5. Andrew (Andy) Alcock
    Friday, 28 March, 2014 at 2:42 pm · Reply

    Every time I hear an excessively rich employer or one of their political mouthpieces, eg Libs, Nats and right wing Labor, my blood boils.

    I came from an Aussie battling family who had to plan the budget very carefully.

    The big employers, who are also the big polluters expect to be able to continue to make huge profits at the expense of ordinary workers. They want to provide minimum wages, they don’t want effective OHS&W or compensation laws, they expect to be allowed to pollute at will and they do not want to have recycling laws. All of these things are considered as negative to encouraging investment.

    This all has to change if we want a fairer Australia and a healthier environment. We cannot expect it to happen either under a “Liberal” or a right wing Labor government, however.

  6. Cassandra
    Monday, 31 March, 2014 at 7:47 pm · Reply

    While employers plead that an increase in the minimum wage of less than 1.5% all that they can afford while inflation is more than twice that on official figures please spare a thought for Queensland politicians who have been granted a pay INCREASES of between $770 to $1730 per WEEK by the government appointed “Independent” pay tribunal.

    A backbencher thus gets more than $3000 per week while committee members (virtually all MP’s bar 1 we are told) get another $1000 a week on top of that and of course ministers are into the public purse for around $7700 + per week! AND of course they all get expenses, government cars, free accommodation away from ‘home’ and subsidised feeds in the parliament ‘canteen’!

    Compare this to those on the minimum wage who must pay all their expenses, travelling. meals etc out of that low wage yet find these Tory governments supporting the employers against the workers and their unions in the Fair Work Commission hearings!

  7. Peter Pride
    Monday, 7 July, 2014 at 10:07 am · Reply

    I am worth more dead that alive , a deal that is looking better every day


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