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Autumn 2005

Minimum Wages Case 2005

The ACTU will seek a $26.60 a week increase in minimum award pay rates in its 2005 Minimum Wage Case in the Australian Industrial Relations Commission.

If successful, the case would lift the Federal Minimum Wage from $12.30 to $13.00 per hour and would increase the full time Federal Minimum Wage from $467.40 per week to $494 per week, or from $24,370 a year to $25,757 a year.

This case only affects HACSU members who are on minimum Award conditions, not those on enterprise bargaining agreements. Significantly, this could be the last minimum national wage case of its kind, with John Howard considering appointing a panel of economists to preside over these cases, making determinations on the basis of
the economic conditions, rather than need. On the basis of the Howard Government's consistent opposition to minimum wage increases, it is difficult to believe any new system of minimum wages will be fair.

Low paid workers need a decent wage rise.

Around 1.6 million or 19.9% of the workforce are paid under Federal nd State awards. For these workers the ACTU case is the only pay rise they receive each year.

Profits are at record levels whilst the wage share of total factor income has decreased. Yet award workers earn on average only 58% of those paid under agreements. There is no evidence of systemic wages pressure in the economy.

Increasing award wages is an effective tool to reverse growing income inequality.

A decent wage rise for award workers is justified.

Economic growth is strong (up 3.2% in seasonally adjusted terms in the past year), productivity in the award dependent industries exceeds other sectors; unemployment at 5.1% is at its lowest level for 28 years; employment growth continues with increased participation.

The ACTU claim is moderate. The 2005 minimum wage claim will add 0.1% to economy wide wage costs, 0.06% to inflation, and have no negative impact on employment.

Moderate increases in minimum wages do not cost jobs.

The AIRC has found the argument by employer groups that past minimum wage rises have led to significant job losses 'unconvincing':

More than 965,000 women workers rely on award wages.

44% earn less than $15 per hour, 59% are part-time, and 46.5% are casual.

The Federal Government has consistently opposed decent minimum wage rises for the low paid.

Since 1996, the Howard Government has opposed every increase in minimum wages sought by the ACTU, instead offering between $8 and $12 a week.