Minimum wage case: Pennies for workers, billions for the rich

The Fair Work Commission awarded a pittance to workers on 1 June, increasing the minimum wage by 3.5 percent – an extra $24.30 per week. Although slightly ahead of inflation, this is less than half of the $50 weekly rise sought by the Australian Council of Trade Unions. According to the commission, the increase will affect at least 25 percent of workers.

A rally of about a hundred unionists gathered in Melbourne on the steps of the commission that morning, armed with drums, chants and flags. Organised as part of the ACTU’s Change the Rules campaign, speakers at the snap action argued that an extra 64 cents per hour was not enough. Sally McManus made it clear that a living wage was needed, as she stood next to a contingent representing farm workers, who can be paid as little as $8 per hour.

Among the reasons given by the commission for its decision was the “healthy national economy”. It pointed to a 4.3 percent boost to nationwide profits in 2017 and reported growth in 16 out of 19 sectors of the economy. 

Indeed, business is booming, and with its 2018 Rich List – a rogues’ gallery of Australia’s 200 wealthiest capitalists – the Financial Review shows us the beneficiaries. For these esteemed businesspeople, continued economic growth has translated into $49 billion being added to their collective fortunes – a 21 percent rise since last year. The list’s top three individuals have together raked in $11 billion in the past two years.

Compared to these enormous gains for the rich, the commission’s minimum wage rise is a fistful of change tossed into our waiting hats.

Knowing it wasn’t nearly enough, Fair Work cited concerns about “employment impacts” to justify its less than modest gift to the working class. It’s that old argument – bosses won’t employ workers if they have to pay them well, and the whole system will collapse. In other words, we’ve got to live in poverty so that the capitalist class can continue to profit.

The courts are no answer to our problems. The Fair Work Commission upholds the market principles that the bosses deploy as economic blackmail. Even the scraps it fed us this time elicited dramatic predictions of economic ruin from employers’ associations.

This is the same institution that slashed penalty rates, and crushed the industrial action of Sydney’s rail workers when it looked like being successful. It is one small part of the system that puts billions in the pockets of people like Gina Rinehart and the aptly named Anthony Pratt, leaving nothing but poverty for those reliant on the minimum wage.