The debate over the Fair Work Commission’s (FWC) forthcoming annual minimum wage ruling sparked up again on Thursday morning, with employer groups savaging the Australian Council of Trade Unions (ACTU) over its assertion that wage increases will create thousands of jobs.
The ACTU has claimed that a $50 increase in the minimum age, which it has called for in its submission to the FWC, would create between 40,000 and 57,000 full time equivalent jobs nationwide in a year.
Putting together data on low income households with Treasury modelling on wage multiple effects, the ACTU found that between 50,000 and 57,000 jobs would follow from a wage hike within twelve months, as well as a further 30,000 in the following year.
Its second, more pessimistic, projection found that as many as 40,000 jobs would be created in the first year, with 27,000 more following in the next year.
“When people on lower wages get a pay rise they spend it in the local economy, and that creates more jobs,” ACTU secretary Sally McManus said.
But employer groups have slammed the ACTU over the claim, with National Retailers Association (NRA) CEO Dominique Lamb saying it smacked of something dreamt up by someone who’s never paid wages from their own pocket.
“Paying workers $50 extra a week is pointless if that same worker loses their job or has their shifts cut due to the business being unable to afford the higher wage,” Lamb said.
The NRA attracted attention several months ago when it stood apart, even from other employer groups, by calling for a freeze in the minimum wage in its FWC submission.
Australian Retailers Association (ARA) executive director Russell Zimmerman, who has advocated an increase in line with inflation, said that the ACTU’s logic was flawed because while a $50 increase may stimulate consumer spending, total hours worked would fall.
“They don’t basically understand that people work to a wages budget and if it blows out hours will go down,” he said.
“We’ll see people lose shifts or have their hours cut if wages go up by 50 dollars.”
The ACTU’s findings come as the ABS’ unemployment data for March fell short of market expectations, with another rise recorded in part time work.
McManus said the data reflected the difficulties Australian’s were experiencing finding secure work.
“Australians need more secure jobs. We cannot pay full-time bills with part-time pay,” she said.
“People who want full-time work are finding it harder than ever to get, and these figures illustrate that.”
The ACTU has cranked up its efforts to tackle what it says are inequities in Australia’s industrial relations landscape in recent weeks with the launch of a “Change the Rules” campaign.
A series of demonstrations are set to take place across the country in April and May in what will be the biggest push from the ACTU since its response to the Howard Government’s Work Choices in 2007.
— Unions NSW (@unionsnsw) April 18, 2018
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.