Low-paid workers miss out on wage rise

Australia's 1.3 million low-paid workers will miss out on a pay rise after a
decision to freeze the minimum wage for the first time in 17 years.
The Fair Pay Commission blamed the global financial crisis for its decision on
Tuesday to keep the minimum wage at $14.31 an hour, or $543.78 a week.
The commission also said a rise was unwarranted because low-paid workers received a
boost to their disposable incomes through tax changes and the federal government's
recent stimulus packages.
But unions rubbished the decision, saying it would only stifle consumer spending,
while the federal government expressed disappointment.
Commission chairman Professor Ian Harper said the decision was primarily to protect
jobs.
"The commission has given first priority to saving jobs and keeping Australia's
unemployment rate as low as possible," he told reporters in Melbourne.
Prof Harper said the commission was concerned a blanket increase in minimum wages
may not be affordable for all businesses and would result in lower employment and
some company closures.
"This is not the time to risk the jobs of low-paid Australians by increasing minimum
wages," he said.
The ACTU had argued for a $21-a-week rise, which would have lifted the minimum wage
to $564.78 a week, while the Australian Chamber of Commerce and Industry opposed any
wage increase.
Workers in such areas as childcare and hospitality are among those who work for a
minimum wage.
Last year, low-paid workers across Australia received a $21.66-a-week pay rise,
taking the minimum wage to its current level.
While business groups applauded the decision to keep the minimum wage on hold, it
was attacked by the government and the ACTU.
Acting Prime Minister Julia Gillard said it would mean a drop in real wages for the
nation's lowest earners.
"We do believe the decision is a disappointing one," she told reporters.
"Australians who are relying on minimum wages are going to experience a real-wage
reduction."
According to the commission's modelling, the disposable incomes of low-paid single
workers increased by between $21 and $30 a week in 2008-09, while couples'
disposable incomes rose between $28 and $41 over the same period.
ACTU president Sharan Burrow said it was "nonsense and insulting" to suggest the
wage freeze would be offset by tax cuts and stimulus payments.
A $3-a-week increase in disposable incomes through the proposed tax cut would not
meet the rising cost of living, she said.
"Frankly we couldn't have even dreamed that the Fair Pay Commission would award zip,
zero, nothing to working Australians who are bearing such pressures in terms of the
current economic situation," Ms Burrow said.
The chamber of commerce's workplace policy director David Gregory said it was a
sensible decision given the economic environment.
"Certainly we think that it's the best outcome in that context for Australian
businesses. It's also the best outcome for Australian employees in terms of
preserving Australian jobs."
Australian Industry Group chief executive Heather Ridout said the commission's
decision was understandable in the present economic climate.
Opposition treasury spokesman Joe Hockey told Sky News that workers missed out on
the increase because the government had been splashing money around with its
stimulus package.
Tuesday's ruling was the final decision by the commission before its role is taken
over by Fair Work Australia, which will have an opportunity to review minimum wages
again in six months.