I think it’s somewhat refreshing that the newly formed “Australian Fair Pay Commission” decided to increase the minimum wage by 5.65% or $27.36 per week for the 1 million lowest paid employees in Australia, those employees who earn less than $700 per week.
The Australian Fair Pay Commission was recently established to set and maintain a federal minimum wage that will promote the economic prosperity of the people of Australia under the Workplace Relations Amendment (Work Choices) Act 2005.
Chairman Professor Ian Harper came to the Commission with very strong economic credentials, but also possessing equal doses of compassion and integrity. Together with his fellow Commissioners he has presided over a decision in stark contrast to the submissions from Government and Industry groups for a minimal increase. These submissions argued the increase recommended by the Australian Council of Trade Unions of $30 per week would be irresponsible, leading to widespread unemployment and inflation. Whilst the Commission acknowledge a nexus between wage rates and employment it nevertheless on balance rejected theses arguments and granted a $27 increase.
I agree with the Commission. Economic outcomes need to be balanced with principles of fairness and integrity by providing protection to lower paid workers. The idea that such decisions will lead to 300,000 job losses and widespread inflation is a highly fanciful notion based upon flawed economic analysis. It all boils down to common sense, that is to say a fair day’s work for a fair days pay for those of minimal bargaining power in a democracy.