Wages – new approach needed

Wage growth is stalling, raising further concerns over the Government’s strategy for closing the earnings gap with Australia, said the CTU today. The Labour Cost index shows that wages grew by 1.6 percent in the year to September 2010, only just keeping pace with the inflation rate of 1.5 percent.

Average hourly earnings in the year to September 2010 grew by only 1.3 percent, the smallest annual growth since June 1994.

Peter Conway, CTU Secretary said: “With inflation set to exceed 4 percent next year as the GST rise takes effect there will be more pressure from workers for fair wage increases. The situation is made worse by the fact that the bulk of the tax cuts have gone to those on high incomes.”

“It is time for some better processes to attempt this major task of catching up with Australian wages. The Government has an aim of this being achieved in 2025. That is more than five general elections away. Surely we need some milestones along the way?”

“The CTU is proposing a focus on three main elements: lifting the minimum wage; an open discussion on how we establish industry standards for wages across the economy; lifting labour and multifactor productivity and ensuring the benefits are shared.”

“We are asking the Government to meet with the CTU to discuss how we can set some targets for, say, 2012, 2014 and 2016 to make a start on closing the wage gap.”

Peter Conway added: “It is nevertheless good to see that full time equivalent jobs grew by 1.6 percent for the year to September, pointing to some better news when employment figures are released on Thursday.”

The median increase in wages for the September quarter was 2.8 percent, a slight lift from the June quarter. “However,” said Peter Conway, “the latest annual median increase at 2.9 percent is the lowest since 2001.”

ENDS

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