The following is an expanded Letter to The Editor by Des Moore, member of the HRN Board of Management, in the Australian Financial Review:
Two things stand out from the Fair Work Commission’s decision to increase the so-called minimum wage by 2.6 per cent (“World’s highest low-paid workers”, June 4).
First, the decision to cover 1.5 million employees means there is an unnecessary increase to the many earning well above the lowest award rate who do not need social protection. Indeed, the Commission acknowledges that “a significant proportion live in middle to low income households” and that the tax-transfer system can provide (it does) more targeted assistance. It is obvious that the coverage is grossly excessive.
Second, the Commission also acknowledges that its decision “may reduce the capacity to employ the marginalised”. In reality there is no “may” about it: [it means that employers are unable to employ low-skilled workers at an annual rate of less than about $32,000. The union leader who winged on television about the supposed financial difficulties of those on the minimum (apparently she also owns a house and a car) should spare a thought for the many who cannot be employed at a lower wage. ]
More generally, the decision illustrates the need to replace the Commission with a regulatory body which gives priority to increasing national productivity.