Each year the Fair Work Commission (FWC) conducts an Annual Wage Review (AWR) and makes a decision on whether or not to provide an increase in the minimum rates of pay in all modern Awards including the Nurses Award and the Aged Care Award.
The decision also determines the national minimum wage for employees not covered by an Award or enterprise agreement and takes effect from 1 July each year. While the vast majority of nurses, midwives and care workers have their wages and conditions determined in enterprise agreements, some remain on Award rates of pay and depend on the outcome of the AWR for a wage increase.
Although not common in the health and community service sector, some enterprise agreements tie wage increases under the agreement to outcomes of the annual wage review.
It will not surprise anyone that every year employer groups argue that business conditions and the economy can’t support an increase, that wage costs are already too high and that any increase will impact negatively on the viability of the business and result in job losses. Last year employer claims ranged from zero increase to 1.8%.
The FWC granted 3.3% providing just 59 cents per hour increase in the minimum wage. This year key employer groups are proposing up to a 1.9% increase.
While the FWC is required to take into account a number of factors and balance the interests of business and the wider community on the one hand, and the interests of workers on the other, minimal increases awarded by the FWC have eroded living standards for the many thousands of employees who rely on award and minimum wages.
To add insult to injury, last year’s FWC decision to cut weekend and public holiday penalty rates by between 25 and 50% in the retail and hospitality sectors resulted in actual pay cuts for some already low paid award reliant workers.
This year the ACTU is calling for a 7.2% increase in the minimum wage, about $1.32 per hour or $50.00 per week as part of a long-term strategy to restore a ‘living wage’ where the minimum wage is around 60% of the median adult full time earnings.* Currently it sits at about 53.8% having fallen from 58.4% in mid 2004.
The FWC acknowledged in its last decision that the level of the minimum wage relative to the median wage is an important indicator of relative living standards and wage inequality.
It also observed that about one third of people in poverty were wage earners living in households. In addition , about half of these families had children.
This is surely an unacceptable situation and a strong indicator that our current system for setting minimum wages is failing.
This is the crux of the ACTU’s claim- to stop the slide of more and more people on minimum or low award wages into poverty. ACTU Secretary Sally McManus sums it up by stating: “People should not work fulltime and struggle to pay for the basics of life. We need to restore a living wage”.
The slide in minimum and award wages and low wage growth in general is also contributing to greater income inequality.
Some of the cold hard facts recently published by the ACTU, (see below), paint a grim picture and are a timely reminder that the rules have to work for all in our community not just the privileged few.
The ANMF supports the ACTU campaign to change the rules to bring more balance back to our industrial relations system particularly in relation to the setting of minimum wages, enterprise bargaining and rights of workers to regular and secure employment.
Find out more about the Change the Rules Campaign: https://changetherules.org.au/
* (The median wage being the wage received by someone sitting in the middle of the income distribution. It is substantially lower than the average wage, which is pushed up by those on high incomes, particularly those in the top 10% of income earners).
INEQUALITY: SOME FACTS
- income inequality is greater than at any time in the last 70 years;
- the top 1% have over 22% of total Australian wealth;
- the top 1% own more wealth than the bottom 70% of Australians combined;
- the richest 10% have greater income growth than the poorest half of all Australians combined;
- profits were up 40% to March 2017 – the strongest gains in 15 years, yet wage growth is the lowest on record;
- 40% of Australians are in insecure work;
- over 1 million Australians are underemployed and want to work more hours