Boost minimum wage to create $3 billion stimulus, say unions
Financial Review.  April 21

Granting the union movement's claim for a minimum wage increase of $27 a week would generate a $3.1 billion economic stimulus as low-paid workers would spend their pay rise, the Australian Council of Trade Unions said on Monday.

In a submission to the Fair Work Commission rejecting employer arguments against its claim, ACTU said a $27 a week pay rise would give low-paid workers more money to spend.   

"While not likely to be large, a conservative estimate of the size of this stimulus, based on $27 per week for 18.8 per cent of the workforce … equates to a stimulus of $3.1 billion for the year," ACTU said.

"Such a stimulus will not prompt an immediate investment boom, but it will provide a much needed boost to the adjustment process already under way."

ACTU secretary Dave Oliver said calls by employer groups for an increase of as little as a $5.70 a week amounted to a real wage cut for low-paid workers when taking into account inflation.      

"A $27 per week pay rise for our lowest-paid workers is essential if Australia is to avoid creating an underclass of working poor," he said. "Labour productivity is high, profits are up, CEO salaries are certainly going up – yet the share of the pie for workers is going down."    

Australian Industry (Ai) Group, which has advocated a $10.25 a week increase, told the commission that ACTU had understated the current weakness of the labour market. Ai Group backed the federal government's position that increases in minimum wages could reduce employment, particularly for young people.

"The ACTU's proposed minimum wage increase of $27 per week up to the base trade rate and 3.6 per cent for higher classifications is unrealistic and unsustainable, and would be unfair to those whose job prospects it would damage," it said.

"We note that it is significantly above the current inflation rate of 1.7 per cent. The interests of those in secure jobs should not be put ahead of those looking for work and those whose jobs could be lost or hours of work reduced if the wage increase awarded this year is not modest."

ACTU said it was not surprising that industry associations concentrated on the costs for an individual business of an increase in the minimum wage.

"This is the direct impact that their members see from such an increase and it is this direct impact that members expect their associations to frame their advocacy around," it said.

"Their failure to recognise that an increase in the minimum wage also implies more customers coming through the door with more money to spend is just a result of their limited view of the economy."   

trade union economics...  where does that $3B come from?  companies, who will then raise their prices by about... $3B.

now if you want to talk about productivity... THAT is where money is actually generated.

Grappler Deep State Feller wrote on Apr 21^st, 2015 at 7:23pm:


that is largely drivel and avoids economic fundamentals like the plague.  it is less a cost of 'living' than it is a cost of 'expectations and entitlement'  the later have out-stripped our income, not our cost of actual living.

This is why one should join a union.      

longweekend58 wrote on Apr 21^st, 2015 at 7:39pm:


Any chance of addressing the issues raised in a sensible way, Count Von Drivel?  Or will you content yourself with personal attack and hyperbole?

Got some figures to show how cost of living hasn't outstripped wages?  Electricity alone will fix your little red wagon... road tolls will add another nail... rising gas prices another....

Which goes up first?  Prices or wages?

Stay off the sauce, handsome....

And that's Entitlements™...... intellectual (word used advisedly) property of the primary cost raising party in this country today....

You mean that they protect the workers.  Make sure they have fair wages, and things like penalty rates, for working weekends and public holidays.  Thank you unions.            

The Share Of The Pie For Workers Is Going Down

Let them eat cake ?

Swagman wrote on Apr 25^th, 2015 at 11:25am:


They have been doing that for decades while watching their share being eroded while the boss has been taking a bigger share for doing less.