The government’s submission to the Fair Work Commission’s annual wage review symbolises everything that is sneaky, visionless and economically ignorant about this government. It also makes a mockery of the government’s recent pretence of focusing on women.
It was only last week that Scott Morrison reshuffled his cabinet — an act described by Australian of the Year Grace Tame (showing more political smarts than many press gallery journalists) as a “superficial distraction” — and claimed a Damascene conversion on the gender issues he had been hoping would go away since February.
Among the distractions was the appointment of Jane Hume — whose most recent brainstorm had been to make domestic violence victims raid their super — as minister for “Women’s Economic Security”.
But the government’s submission to this year’s wage review shows what it really thinks about women’s economic security: the less of it, the better.
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Today’s media coverage has focused on the government’s gutless recommendation that it “urges the panel to take a cautious approach” — tantamount to saying don’t give anyone a pay rise, without risking the political damage of being seen to explicitly attack the low-paid.
It’s also exactly the same language that the government used four years ago when urging the commission to avoid pay rises. Back then, when Scott Morrison was treasurer, the government argued that low-income women shouldn’t get pay rises because many of them were in households with higher-earning partners. That is, low-income women didn’t need a pay rise because they had a male breadwinner.
As we noted at the time, the government’s arguments were profoundly flawed and ignored evidence from the Productivity Commission. Four years later, the “breadwinner” argument is now relegated to a subtle comment that 45.2% of low-income earners live in households in the higher five income deciles.
But the government still objects to low-paid women receiving a pay rise. It quotes the Fair Work Commission’s decision from the middle of the pandemic last year, which endorsed the claim of right-wing employer group ACCI, who argued to the FWC “there must be a tipping or critical point at which any uprating in minimum wages that seeks to take into account gender pay disparity, may risk adding to underemployment or reducing hours and jobs to the lower paid, which would disproportionately negatively impact women, and perversely serve to reduce incomes and opportunities”.
That is, don’t give low-paid women a pay rise of any significance because it’ll just mean fewer jobs for them — at least according to employer groups.
That’s despite the government having to acknowledge earlier in its submission that Australian evidence shows no significant employment impacts from wage rises — it relies on US data instead to argue there’s a link. Tellingly, the government doesn’t mention the most compelling Australian evidence of all: that cuts to penalty rates saw a decline in employment in retail and hospitality after they were inflicted by the Fair Work Commission in 2017.
The government’s opposition to wage rises, especially for the low-paid (who are far more likely to spend a pay rise than higher income earners) directly contradicts the repeated, indeed incessant, calls from the Reserve Bank for higher wages growth.
Again, it’s telling what is left out in the submission: the only mention of RBA governor Philip Lowe’s views on wages — he has said over and over that higher wages growth is central to both monetary policy and the broader economy — is a reference to him linking higher productivity to wages growth.
Of course, what’s missing from that citation is the fact that the RBA has recognised for a couple of years now that wages growth has now become “decoupled” from productivity growth — and not in a way favourable to workers. Also missing is another point made by the RBA, that, in the words of Lowe, “stronger investment will also boost our productivity and provide a firm basis for stronger growth in nominal and real wages” — understandably given the lack of a government plan to boost investment.
By enthusiastically endorsing employer groups’ insistence that workers receive little or no pay rise, the government is persisting in its long-running and highly successful war on wage growth. This has led to nearly a decade of wage stagnation for most workers and real wage cuts for many.
And it makes a mockery of the government’s pretensions to giving a damn about women’s economic security.