Minimum Wage Grossly Inadequate & Must be Based on Family Not Single Households

Catholic Communications, Sydney Archdiocese,
7 May 2015

Brian Lawrence, Chair of the Austrlaian Council for Employment Relations

Brian Lawrence, Chairman of the Australian Catholic Council for Employment Relations (ACCER) has called for an urgent review of the minimum wage which he says is grossly inadequate and forcing families into deeper and deeper poverty.

In its submission to the Fair Work Commission for the Annual Wage Case 2014-15 to be decided in June, ACCER is pushing for an increase in the National Minimum Wage (NMW) from its current $640.90 per week by an additional $42.40 per week. This amount would be implemented over a period of time, starting with $10.00 extra per week in 2015 and eventually rising to the full amount which ACCER says will bring the NMW in line with the current base rate for cleaners of $683.50 per week.

Mr Lawrence says even with this increase, the Minimum Wage would still not constitute a living wage but would nevertheless be a modest and realistic step in the right direction.

"An extraordinary feature of Australian minimum wage setting over the past few decades, at least, has been the lack of any serious attempt to set wages by reference to the needs of the low-paid," he says.

One of the major issues of deep concern to Mr Lawrence and ACCER is the unprecedented move by the Fair Work Commission in its 2014 Annual Wage Review to replace the family household with the single person's household as the benchmark against which the minimum wage was set.

"For the first time in more than a century of minimum wage setting in Australia, the Fair Work Commission decided the 'appropriate reference household' for the purposes of setting minimum wages is the single person household," he says and points out that by doing this the Commission excluded any considerations of the needs of the low paid with family responsibilities.

Minimum wage families forced to struggle below poverty line

The decision by the Commission to change the benchmark from a family to a single household was adopted just three weeks after the delivery of last year's contentious Federal Budget.

By using a single household with far lower costs and needs than that of a low paid breadwinner with a wife and two children to support, last year's NMW fell far short of what is considered a living wage.

"The legislation under which the Fair Work Commission operates does not require a single person benchmark, and was a policy decision taken by the Commission with no notice given or reasons supplied," Mr Lawrence says.

In ACCER's submission, he points out that not only is the single person benchmark unfair but is contrary to law.

The NMW has markedly declined and fallen below what most would consider a living wage over many years, and in particular since 2004.

ACCER wants Minimum Wage to at least be brought to same level as current base wage rate for cleaners

"From January 2004 to January 2015 a NMW-dependent family of four has fallen further into poverty," he says.

Charting this decline, he reveals that in January 2004 an NMW-dependent family of four was 3.3 percent below the poverty line compared with January this year when the poverty gap had widened to 8.7 percent with a poverty gap of $91.91 per week.

"What was a manifestly inappropriate wage in 2004 was a grossly inadequate wage by 2014 when the Commission adopted the single person benchmark forcing families even deeper into poverty," Mr Lawrence says.

ACCER is also deeply troubled by a submission filed by the Australian Council of Trade Unions for this year's Annual Wage Review stated the ACTU would "accept" the Commission's "decision to focus on single person households."

"This response will stagger many people especially when the media release from ACTU regarding the latest wage claim states that 'maintaining a fair minimum wage is essential if Australia is to avoid creating an underclass of working poor," Mr Lawrence says and insists that nothing is more likely to hurt the working poor, than this policy the ACTU has accepted without protest or argument.

ACCER says National Minimum Wage is well short of a living wage

Mr Lawrence believes the ACTU's acquiesce of the Fair Work Commission's NMW benchmark policy is due to the fact that it has very few members among workers employed on the minimum wage.

In the absence of the Fair Work Commission reversing its policy, or having it reversed by judicial review, Mr Lawrence warns that Australia's lowest paid workers with family responsibilities will face increasing poverty and fall further and further behind.

ACCER is an agency of the Australian Catholic Bishops Conference which provides the Bishops with advice on employment relations issues and acts as a public advocate for good employment relations.

More than 180,000 employed by the Catholic Church through its many agencies across Australia. One of ACCER's principal activities and in keeping with the ethos of the Catholic Faith is  the advocacy of adequate safety net wages for low paid workers.