| The Fair Pay Commissioner stated that during these difficult trading times, increases in the minimum rate will mostly impact on those employees that rely on this rate of pay. He said that it is these people who will be put out of work if their employer is required to pass on the increase and that employer cannot afford it. The Fair Pay Commission also noted that taxpayers had received substantial Federal Government handouts in recent times to limit the impact of the current economic crisis.
I never thought that I would see in my time, a national minimum wage decision that did not pass on an increase of some sort. When faced with these types of situations historically, the Fair Pay Commission predecessor, the Australian Industrial Relations Commission has chosen to delay any increase or conducted a further wage review several months hence.
This time last year the Fair Pay Commission handed down a decision to increase minimum weekly wages by $21.66. At the time I thought that this was a bit high but nobody, including the Commission, could have predicted the pace of the local economic decline that has occurred since.
There is another view or theory as to the impact of wage increases apart from being a negative cost factor for business. This view suggests that provided the system continues to deliver increases to salary and wage earners, then they will maintain capacity to spend. This increased or continued capacity to spend then flows on to the businesses that retail goods and provide services such as the repairing of goods. Does this sound logical? Is so, it would also be logical to assume that one of the beneficiaries of this spend would be the retail motor industry.
One difficulty with this perspective is that the overall number of minimum wage earners is very much the minority (1.3million) in comparison to the total work force so this, on its own, may not be sufficient to validate the theory. But on the other hand an upward movement of minimum rates has some level of flow-on effect to over award wages. The degree of flow-on to over award payments is uncertain however it is likely to be much less in this current economic environment. With this additional level of (over award) wage increase through the resultant minimum wage flow-on, it is more likely that this minimum wage increase flow-on theory could have some legs but they would not be moving quick enough to get out of a walk.
Of course all of this theory is absolute nonsense if you are a small business entrepreneur, with limited expansion capacity, struggling to meet the staff’s weekly wages bill, let alone pay yourself. Of course, the key beneficiary of this non wage increase decision will be that employee who is working for that employer who is struggling financially. Often it is the least skilled employee, usually the apprentice, the detailer or the record keeper that is targeted for termination in such circumstances. It is that employee whom I am sure is most grateful that the Fair Pay Commissioner has not passed on a wage increase, which in turn has increased their chances of keeping their job. Their employment future may be a little bit more certain than what otherwise may have been the case. |
