Opposition leader Bill Shorten has vowed to replace the minimum wage with a “living wage” – a move the ACTU says would be a “significant step forward in the fight against low wage growth and poverty in Australia”.
Labor leader Bill Shorten says he will change the law so that the Fair Work Commission (FWC) has the tools to deliver a living wage for Australia’s low-paid workers.
Currently the FWC, by law, has to consider the health of the economy and business competitiveness as well as the needs of the low paid. Under Labor’s changes these considerations would remain, but the Commission’s highest priority will change to “making sure no person working full time will be living in poverty”.
Changing the minimum wage to a living wage would directly benefit around 1.2 million Australians, or one in 10 workers.
Labor says the minimum wage has become “a bare safety net” thanks to rules put in place by Liberal-National governments that tie the hands of the FWC.
The FWC has conceded that Australia’s minimum wage of $18.93 per hour, or $37,398 per annum, leaves many full-time workers in poverty.
The Australian Council of Social Services says last year there were more than 3 million people living below the poverty line, including 739,000 children.
“A living wage should make sure people earn enough to make ends meet, and be informed by what it costs to live in Australia today – to pay for housing, for food, for utilities, to pay for a basic phone and data plan,” says Bill Shorten.
Shorten says that while company profits have grown five times faster than wages in the past year, many Australian workers are not being rewarded for their productivity or their effort and their wages are failing to keep up with cost of living rises.
“In the last five years, out-of-pocket costs to see a GP are up 24 per cent, private health insurance premiums are up 30 per cent, electricity prices are up 15 per cent, and long day childcare costs are up 24 per cent,” he says.
ACTU Secretary Sally McManus welcomed Labor’s new wages policy.
“The living wage is an Australian idea; it’s time it was brought back. It is the essence of a fair go – workers should not be working full-time hours and earn poverty wages,” she said.
“This is an essential and fantastic step to fixing our broken wages rules and stands in contrast to years of inaction from the Morrison government, who now admit that low wage growth is not a side effect but a design feature of their economic policies.”
The ACTU wants the minimum wage to be increased to 60 per cent of the median wage to transform it into a “living wage”.
This definition of a living wage has gained currency in Britain, where the independent Low Pay Commission has recommended that parliament adopt a living wage target of 60 per cent of median earnings by 2020.