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Increase to minimum pay

By 10 June 2014 31

The Fair Work Commission has announced an increase to minimum pay rates from July 2014. Minimum pay will be increased by 3% which equals an extra $18.70 per week.

According to the ABC, Employers and the ACT Chamber of Commerce have been quick to attack the increase as crippling to business, destroying many potential job opportunities.

As the Unions were pressing for a $27 per week increase and businesses had claimed they couldn’t afford more than $8.50, the decision landed somewhere near the middle.

Given the additional pressure placed on low income earners in the recent budget, this must be seen as a good move for employees. But, if it is potentially taking jobs away and leaving people unemployed does that really lead to benefit?

In any case, this will surely fuel the fires of penalty rates, given there has been a push to abolish them now that we are a more 24/7 society with less focus on a standard Monday-Friday 9-5 working week.

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31 Responses to Increase to minimum pay
#1
rommeldog568:34 pm, 11 Jun 14

Less tax, that’s no where near enough for those ACT workers to keep pace with the potential trippling of Annual Rates (the Lib’s claim will happen in 11 years or less !), higher green inspired electricity charges, increased car rego, increased water charges, increased parking charges, etc, in the last ACT Budget.

Maybe the Fair Work Commission needs to hand down a separate, higher determination for ACT workers – to make up for skyrocketing ACT Gov’t charges and fiscal mismanagement ?

#2
wooster3:21 am, 12 Jun 14

The minimum wage creates unemployment – simple as that.

Time someone re-explains to the Australian population how unionism itself thrives on unemployment — if wages were in equilibrium at a point that maximised employment, why would anyone join a union? Put differently, unions need to price their protected staff at a level above the market wage in order to create incentives for workers to stay in the union.

That, of course, is just theory, the truth is that union movements stopped caring about workers decades ago.

#3
miz7:37 am, 12 Jun 14

I reckon paying someone properly for the work they do is akin to fair trade. If businesses are so marginal they can’t manage to pay staff properly, they need to rethink whether they should be in business at all.
However IMHO housing affordability is the problem at the root of many key issues including this one (people need more money simply for shelter; mothers feel pressured to go back to work soon after having a baby to pay the mortgage or rent; etc etc.)

#4
rosscoact8:08 am, 12 Jun 14

The proposed minimum wage is $16.87 per hour. Yep, that’s a massive $33,280 a year.

Even the land of the working poor, the US has admitted that low minim wages are a problem. The Seattle proposed minimum wage, albeit to be phased over seven years, is the equivalent of $16.20 ph and that is in a country which has much lower cost of living.

But Uncle Joe will join the fray and through bracket creep will shaft them for a good percentage of their earnings, so no need to worry that the worse-off-than-you may be able to close the gap.

#5
dungfungus8:24 am, 12 Jun 14

wooster said :

The minimum wage creates unemployment – simple as that.

Time someone re-explains to the Australian population how unionism itself thrives on unemployment — if wages were in equilibrium at a point that maximised employment, why would anyone join a union? Put differently, unions need to price their protected staff at a level above the market wage in order to create incentives for workers to stay in the union.

That, of course, is just theory, the truth is that union movements stopped caring about workers decades ago.

The mythical Australian unionised “werking family” disappeared with the last Labor government.

#6
wildturkeycanoe8:31 am, 12 Jun 14

wooster said :

The minimum wage creates unemployment – simple as that.

How exactly does it create unemployment? If businesses can’t afford a 3% increase to keep up with inflation, for our poorest paid workers, they are in strife already and shouldn’t be in business.
What happens to these businesses when their insurance goes up by 6%, or fuel prices go up 1.5%, or their raw materials cost more?
Dropping wages whilst everything else grows exponentially creates a class of workers who struggle to survive and have to have multiple jobs, thereby taking employment from other people who could have been working those same jobs. THIS creates unemployment and worse living conditions as well.

#7
dungfungus10:05 am, 12 Jun 14

wildturkeycanoe said :

wooster said :

The minimum wage creates unemployment – simple as that.

How exactly does it create unemployment? If businesses can’t afford a 3% increase to keep up with inflation, for our poorest paid workers, they are in strife already and shouldn’t be in business.
What happens to these businesses when their insurance goes up by 6%, or fuel prices go up 1.5%, or their raw materials cost more?
Dropping wages whilst everything else grows exponentially creates a class of workers who struggle to survive and have to have multiple jobs, thereby taking employment from other people who could have been working those same jobs. THIS creates unemployment and worse living conditions as well.

The 3% is just the wages increase. Everything increases commensurately, like superannuation guarantee, workers compensation, penalty rates and the costs of goods and services that the business has to buy will now be more expensive due to wage increase inputs.
More than likely it will kick off inflation which will be great for those who are highly geared in debt.

#8
VYBerlinaV8_is_back2:42 pm, 12 Jun 14

dungfungus said :

wildturkeycanoe said :

wooster said :

The minimum wage creates unemployment – simple as that.

How exactly does it create unemployment? If businesses can’t afford a 3% increase to keep up with inflation, for our poorest paid workers, they are in strife already and shouldn’t be in business.
What happens to these businesses when their insurance goes up by 6%, or fuel prices go up 1.5%, or their raw materials cost more?
Dropping wages whilst everything else grows exponentially creates a class of workers who struggle to survive and have to have multiple jobs, thereby taking employment from other people who could have been working those same jobs. THIS creates unemployment and worse living conditions as well.

The 3% is just the wages increase. Everything increases commensurately, like superannuation guarantee, workers compensation, penalty rates and the costs of goods and services that the business has to buy will now be more expensive due to wage increase inputs.
More than likely it will kick off inflation which will be great for those who are highly geared in debt.

Proposed changes to payroll tax legislation in the ACT will also have an effect.

#9
wildturkeycanoe6:12 pm, 12 Jun 14

dungfungus said :

wildturkeycanoe said :

wooster said :

The minimum wage creates unemployment – simple as that.

How exactly does it create unemployment? If businesses can’t afford a 3% increase to keep up with inflation, for our poorest paid workers, they are in strife already and shouldn’t be in business.
What happens to these businesses when their insurance goes up by 6%, or fuel prices go up 1.5%, or their raw materials cost more?
Dropping wages whilst everything else grows exponentially creates a class of workers who struggle to survive and have to have multiple jobs, thereby taking employment from other people who could have been working those same jobs. THIS creates unemployment and worse living conditions as well.

The 3% is just the wages increase. Everything increases commensurately, like superannuation guarantee, workers compensation, penalty rates and the costs of goods and services that the business has to buy will now be more expensive due to wage increase inputs.
More than likely it will kick off inflation which will be great for those who are highly geared in debt.

Like I said, 3% in wages is just a drop, apart from the other things mentioned, but why didn’t business jump up and down when a flat 10% was laid upon all of us in the Howard era? 10% on everything, but now 3% is a big deal? C’mon, the fuel excise increase will have much more effect than this.

#10
chewy148:06 pm, 12 Jun 14

dungfungus said :

wildturkeycanoe said :

wooster said :

The minimum wage creates unemployment – simple as that.

How exactly does it create unemployment? If businesses can’t afford a 3% increase to keep up with inflation, for our poorest paid workers, they are in strife already and shouldn’t be in business.
What happens to these businesses when their insurance goes up by 6%, or fuel prices go up 1.5%, or their raw materials cost more?
Dropping wages whilst everything else grows exponentially creates a class of workers who struggle to survive and have to have multiple jobs, thereby taking employment from other people who could have been working those same jobs. THIS creates unemployment and worse living conditions as well.

The 3% is just the wages increase. Everything increases commensurately, like superannuation guarantee, workers compensation, penalty rates and the costs of goods and services that the business has to buy will now be more expensive due to wage increase inputs.
More than likely it will kick off inflation which will be great for those who are highly geared in debt.

So when inflation is running in the mid to high 2% range, you think 3% is big deal? Its almost a real pay cut rather than a rise. Wage growth has been extremely muted in recent years, but that doesn’t stop some people bleating about “damn unions” and how we’ll all be roomed though. Here’s a nice article for those who care about reality over pure ideology:

http://www.abc.net.au/news/2014-06-11/jericho-ir-debate-hijacked-by-the-right/5512754

#11
260410:18 pm, 12 Jun 14

rosscoact said :

The proposed minimum wage is $16.87 per hour. Yep, that’s a massive $33,280 a year.

Even the land of the working poor, the US has admitted that low minim wages are a problem. The Seattle proposed minimum wage, albeit to be phased over seven years, is the equivalent of $16.20 ph and that is in a country which has much lower cost of living.

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum. My mother just paid someone $1000 to spend a day demolishing her kitchen prior to a renovation. Those are all unskilled jobs which nearly anyone can do. So, anyone who’s dissatisfied with their minimum wage job should go and get another one which pays better.

As for the United States, only 4.7% of all workers in that country are paid at or below the minimum wage. Half of those workers are aged between 16-24. How big a problem can it be?

wildturkeycanoe said :

How exactly does it create unemployment?

Minimum wages prohibit employers from hiring employees whose labour is worth less to them than the minimum wage. Whose labour is worth so little? Young people. People with no prior work experience. Untrained people. Retarded people and disabled people receive 70% of the minimum wage, which may still be more than their labour is worth to an employer.

Raises in the minimum wage also make employers increase the amount of automation they use, and fire minimum wage workers. No doubt self-service checkouts have been introduced into supermarkets because the costs of purchasing, operating and maintaining them is now lower than paying cashiers to man traditional cash registers. Would supermarkets prefer to have all cashiers? I think so – the self-service machines malfunction quite frequently and there is greater scope for theft. But those disadvantages are obviously outweighed by the benefit of not having to employ staff at a minimum wage of $16.87 per hour.

#12
260410:47 pm, 12 Jun 14

chewy14 said :

So when inflation is running in the mid to high 2% range, you think 3% is big deal? Its almost a real pay cut rather than a rise. Wage growth has been extremely muted in recent years, but that doesn’t

So if a business has to pay its staff an extra 3%, but can only raise prices by an average of 2% because that’s the inflation rate, where is the extra 1% salary for all of its staff going to come from? (Not to mention other increases in on-costs like super)

Also, let me get this straight – you honestly think that the article you linked to is objective? I find it quite amusing that you talk about “pure ideology” but cite an article which claims that the Fair Work Act favoured bosses too much, and which complains about the increasing percentage of national income going to shareholders rather than “workers”. If Greg Jericho had better credentials than being a former public servant, he’d understand that much of the growth in national income over the past decade has been in mining and agriculture, which are extremely capital-intensive but not labour-intensive. If he was honest, he’d acknowledge that wages can go up at the same time as profits go up. He’d also stop distorting his graphs by making the y-axes start at numbers higher than zero.

#13
Sandman7:46 am, 13 Jun 14

2604 said :

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum. My mother just paid someone $1000 to spend a day demolishing her kitchen prior to a renovation. Those are all unskilled jobs which nearly anyone can do.

Anyone with thousands of dollars worth of equipment , a reliable vehicle capable of carrying it, insurance, and a margin to cover the quiet and rainy times, superannuation, and leave entitlements.

A 23 year old IT Proffesional however can stumble through some bullsh!t Uni course and charge the government $150 an hour as a “contract consultant” with nothing more than a security pass and a stylish haircut. I think that might be a better example of Canberra’s ridiculous wages.

#14
rosscoact8:13 am, 13 Jun 14

Of course, being self-employed, I dream of getting $16.80 an hour :-D

#15
dungfungus8:33 am, 13 Jun 14

Sandman said :

2604 said :

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum. My mother just paid someone $1000 to spend a day demolishing her kitchen prior to a renovation. Those are all unskilled jobs which nearly anyone can do.

Anyone with thousands of dollars worth of equipment , a reliable vehicle capable of carrying it, insurance, and a margin to cover the quiet and rainy times, superannuation, and leave entitlements.

A 23 year old IT Proffesional however can stumble through some bullsh!t Uni course and charge the government $150 an hour as a “contract consultant” with nothing more than a security pass and a stylish haircut. I think that might be a better example of Canberra’s ridiculous wages.

Most contributors on this thread have never risked a dollar of their own so they have no idea of the cost of labour or the risks one takes by electing to run their own business then, when a business venture is successful, the socialists want a share in the profits.

#16
dungfungus10:17 am, 13 Jun 14

rosscoact said :

Of course, being self-employed, I dream of getting $16.80 an hour :-D

Most people who start a business venture do not make anything for the first few years as you would be aware of. There are long hours, no holidays or sickies so indeed $16.80 and hour limited to 35 hours a week plus super, holidays, loadings etc. isn’t a bad deal.

#17
VYBerlinaV8_is_back11:08 am, 13 Jun 14

dungfungus said :

Sandman said :

2604 said :

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum. My mother just paid someone $1000 to spend a day demolishing her kitchen prior to a renovation. Those are all unskilled jobs which nearly anyone can do.

Anyone with thousands of dollars worth of equipment , a reliable vehicle capable of carrying it, insurance, and a margin to cover the quiet and rainy times, superannuation, and leave entitlements.

A 23 year old IT Proffesional however can stumble through some bullsh!t Uni course and charge the government $150 an hour as a “contract consultant” with nothing more than a security pass and a stylish haircut. I think that might be a better example of Canberra’s ridiculous wages.

Most contributors on this thread have never risked a dollar of their own so they have no idea of the cost of labour or the risks one takes by electing to run their own business then, when a business venture is successful, the socialists want a share in the profits.

It’s a well known fact that once someone has spent several years working their can off to build a successful business earning similarly to a mid level public servant that they are now ‘rich’, and as such are the enemy of Working Families, and pay off their Liberal Party mates at the annual One Percenters’ Conference.

#18
wildturkeycanoe11:27 am, 13 Jun 14

Does anyone here realise that minimum wage is only $672/week before tax, if you get 40 hours of work at that rate? For the average cost of living if you are raising a family, it is barely enough to survive. And people here think it is too much? Go and try it for yourselves for a month and then come back and boast how good it is.

#19
dungfungus11:46 am, 13 Jun 14

wildturkeycanoe said :

Does anyone here realise that minimum wage is only $672/week before tax, if you get 40 hours of work at that rate? For the average cost of living if you are raising a family, it is barely enough to survive. And people here think it is too much? Go and try it for yourselves for a month and then come back and boast how good it is.

With that wage one will be living in public housing with a cheap rent + rental assistance and if there is a family involved there will be a raft of Centrelink benefits to supplement the income. As long as the extras are not wasted on grog, cigarettes and poker machines the recepients and their children should live quite well.
Sure, it is not enough to buy a negatively geared investment property but we can’t all be winners.
I worked in a bank after I left school and ended up in a remote country town. I earned the equivalent of $11 per week clear of which $9 per week went for full board in a flea house that even an asylum seeker would refuse to live in. Guess what, I survived and it toughned me up. The rest was easy.

#20
wildturkeycanoe2:33 pm, 13 Jun 14

dungfungus said :

wildturkeycanoe said :

Does anyone here realise that minimum wage is only $672/week before tax, if you get 40 hours of work at that rate? For the average cost of living if you are raising a family, it is barely enough to survive. And people here think it is too much? Go and try it for yourselves for a month and then come back and boast how good it is.

With that wage one will be living in public housing with a cheap rent + rental assistance and if there is a family involved there will be a raft of Centrelink benefits to supplement the income. As long as the extras are not wasted on grog, cigarettes and poker machines the recepients and their children should live quite well.
Sure, it is not enough to buy a negatively geared investment property but we can’t all be winners.
I worked in a bank after I left school and ended up in a remote country town. I earned the equivalent of $11 per week clear of which $9 per week went for full board in a flea house that even an asylum seeker would refuse to live in. Guess what, I survived and it toughned me up. The rest was easy.

Just because you are on minimum wage you are applicable for public housing? Just jump into the queue and see how long it takes to get into a “cheap” rental. It isn’t a roller coaster ride to freedom. If you aren’t renting but have a mortgage and end up on minimum wage, kiss your house goodbye. Yes, family benefit helps, but probably only by putting food on the table.

#21
chewy147:21 pm, 13 Jun 14

2604 said :

chewy14 said :

So when inflation is running in the mid to high 2% range, you think 3% is big deal? Its almost a real pay cut rather than a rise. Wage growth has been extremely muted in recent years, but that doesn’t

So if a business has to pay its staff an extra 3%, but can only raise prices by an average of 2% because that’s the inflation rate, where is the extra 1% salary for all of its staff going to come from? (Not to mention other increases in on-costs like super)

Also, let me get this straight – you honestly think that the article you linked to is objective? I find it quite amusing that you talk about “pure ideology” but cite an article which claims that the Fair Work Act favoured bosses too much, and which complains about the increasing percentage of national income going to shareholders rather than “workers”. If Greg Jericho had better credentials than being a former public servant, he’d understand that much of the growth in national income over the past decade has been in mining and agriculture, which are extremely capital-intensive but not labour-intensive. If he was honest, he’d acknowledge that wages can go up at the same time as profits go up. He’d also stop distorting his graphs by making the y-axes start at numbers higher than zero.

No doubt Jericho is a lefty, still doesn’t take away from the facts in his article. I find it hard to find much fault with what he’s written, and it doesn’t seem that you can pull apart the general thrust of his article either. Do you have any major qualms with his facts?
And the idea that a business would struggle to be able to put their prices up by 3% a year is almost laughable. It would be a very marginal business that would go to the wall over paying their lowest paid workers a CPI level pay rise.

#22
74Daizies8:51 am, 14 Jun 14

2604 said :

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum.

Not sure what part of Canberra your from. I’ve not met a cleaner getting paid that amount of money yet!!
As for ACTION bus drivers… well, maybe you could check your facts. My hubby is a driver and I am here to tell you it is nowhere near $100k …I wish! He works bloody long hours and always takes longer than 8 hour shifts with weekends occasionally.

#23
Maya12310:26 am, 14 Jun 14

2604 said :

rosscoact said :

The proposed minimum wage is $16.87 per hour. Yep, that’s a massive $33,280 a year.

Even the land of the working poor, the US has admitted that low minim wages are a problem. The Seattle proposed minimum wage, albeit to be phased over seven years, is the equivalent of $16.20 ph and that is in a country which has much lower cost of living.

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum. My mother just paid someone $1000 to spend a day demolishing her kitchen prior to a renovation. Those are all unskilled jobs which nearly anyone can do. So, anyone who’s dissatisfied with their minimum wage job should go and get another one which pays better.

I checked ACTION bus driver pay rates. It’s “$68,179 p.a.pro-rata”. A very good wage, but nowhere near the $100,000 you claim.

#24
dungfungus11:45 am, 14 Jun 14

Maya123 said :

2604 said :

rosscoact said :

The proposed minimum wage is $16.87 per hour. Yep, that’s a massive $33,280 a year.

Even the land of the working poor, the US has admitted that low minim wages are a problem. The Seattle proposed minimum wage, albeit to be phased over seven years, is the equivalent of $16.20 ph and that is in a country which has much lower cost of living.

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum. My mother just paid someone $1000 to spend a day demolishing her kitchen prior to a renovation. Those are all unskilled jobs which nearly anyone can do. So, anyone who’s dissatisfied with their minimum wage job should go and get another one which pays better.

I checked ACTION bus driver pay rates. It’s “$68,179 p.a.pro-rata”. A very good wage, but nowhere near the $100,000 you claim.

Is that for a 35 hour week? What about the shift/public holiday loadings and other perks. Even $68,179 sounds too much. That’s about $38 per hour + super + holiday loading ++++++.

#25
Maya12312:19 pm, 14 Jun 14

dungfungus said :

Maya123 said :

2604 said :

rosscoact said :

The proposed minimum wage is $16.87 per hour. Yep, that’s a massive $33,280 a year.

Even the land of the working poor, the US has admitted that low minim wages are a problem. The Seattle proposed minimum wage, albeit to be phased over seven years, is the equivalent of $16.20 ph and that is in a country which has much lower cost of living.

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum. My mother just paid someone $1000 to spend a day demolishing her kitchen prior to a renovation. Those are all unskilled jobs which nearly anyone can do. So, anyone who’s dissatisfied with their minimum wage job should go and get another one which pays better.

I checked ACTION bus driver pay rates. It’s “$68,179 p.a.pro-rata”. A very good wage, but nowhere near the $100,000 you claim.

Is that for a 35 hour week? What about the shift/public holiday loadings and other perks. Even $68,179 sounds too much. That’s about $38 per hour + super + holiday loading ++++++.

Go to the ACTION site and check pay rates yourself like I did and get those answers, if they are available. Not $100,000 plus as suggested, but $68,179 is a very good wage for this skill level. But perhaps it reflects the difficulty getting bus drivers. $68,179 is equivalent to an ANU Grade five, who would no doubt have higher qualifications and many years experience, often working in technical positions, in science for instance. So it’s mind boggling that after just six months a bus driver can earn this, but then again maybe it’s because of the difficult of attracting bus drivers. I would hope there is a good reason for such a high pay level for this job.

#26
Maya12312:40 pm, 14 Jun 14

To put $68,179 into perspective, I checked the ANU Academic staff salary schedule as well, and this is the same or greater than the lower Academic staff pay levels, and there is a large difference in qualifications and years of training as against six months on the job for bus drivers.

#27
watto237:20 pm, 14 Jun 14

Sandman said :

2604 said :

People in Canberra get paid $40-50 per hour to mow lawns and clean houses. ACTION bus drivers earn north of $100,000 per annum. My mother just paid someone $1000 to spend a day demolishing her kitchen prior to a renovation. Those are all unskilled jobs which nearly anyone can do.

Anyone with thousands of dollars worth of equipment , a reliable vehicle capable of carrying it, insurance, and a margin to cover the quiet and rainy times, superannuation, and leave entitlements.

A 23 year old IT Proffesional however can stumble through some bullsh!t Uni course and charge the government $150 an hour as a “contract consultant” with nothing more than a security pass and a stylish haircut. I think that might be a better example of Canberra’s ridiculous wages.

Nothing like using a single case from over 10 years ago to spread misinformation around. The majority of IT workers in Canberra these days are employed by the bigger outsourcers in town and in general get worse conditions than their PS counterparts. $150 ph contracts are as rare as hens teeth. What you will see is government spending $150 ph for services from a company where the person is often paid ~ 1/3 or less of that rate. The IT workers don’t get the cushy redundancy packages, many don’t even get accumulative sick leave, they get the bare minimum 9.25% super, but don’t let facts get in the way of an argument. Also a lot actually have skills of value, as opposed to sitting in a desk job shuffling paper around for decades and expect to get promoted. There are always exceptions, but your example is so far from the truth yet a very common misconception. The number of times i’ve been called some kind of scum IT contractor by someone being paid more than me is quite a lot. Most IT workers in canberra are between $50-80k year and senior people earn more than that obviously, but the help desk people and the desktop support people all get around an average wage. Their are less of the high earners going around compared to the year 2000 IT gold rush.

#28
dungfungus11:12 am, 15 Jun 14

Time for some remedial research from RiotACT 2012.
The $91,000 pa quoted for an Action bus driver then would be about $100K pa now using accrural principles.
http://the-riotact.com/canberra-the-home-of-the-91000-plus-overtime-bus-driver/81827

#29
chewy141:08 pm, 15 Jun 14

dungfungus said :

Time for some remedial research from RiotACT 2012.
The $91,000 pa quoted for an Action bus driver then would be about $100K pa now using accrural principles.
http://the-riotact.com/canberra-the-home-of-the-91000-plus-overtime-bus-driver/81827

Did you read that post first? The $91K wasn’t a salary rate.

#30
dungfungus3:06 pm, 15 Jun 14

chewy14 said :

dungfungus said :

Time for some remedial research from RiotACT 2012.
The $91,000 pa quoted for an Action bus driver then would be about $100K pa now using accrural principles.
http://the-riotact.com/canberra-the-home-of-the-91000-plus-overtime-bus-driver/81827

Did you read that post first? The $91K wasn’t a salary rate.

Yes. I have always been talking about the real cost of employing someone.

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