Published: April 7, 2014 – 12:56PM
It has been a feature of Australia’s social safety net since not long after federation – a minimum wage not set just by market forces, but that considers the living needs of a worker.
But the Institute of Public Affairs – an influential free-market think tank well-connected within the Liberal Party – wants Australia’s minimum wage abolished.
The institute’s Aaron Lane said there was a ‘‘moral case’’ to abolish minimum wages to allow people to experience the ‘‘dignity of work’’.
‘‘Our position is an ideological one and we don’t shy away from that,’’ he said. ‘‘This position can be seen as heartless and wanting people to work for a low wage. But it’s about empowering individuals in being able to choose their own employment.’’
Mr Lane said the current system priced thousands of people out of work and forced employers to cut back staff hours.
‘‘I’m not so concerned about the working poor, I’m more concerned about the unemployed poor,’’ he said.
‘‘Continuing to increase the minimum wage is a threat to the dignity of the unemployed.’’
For this year’s minimum wage decision, to be decided by the Fair Work Commission in June, the institute wants to see it frozen at $16.37 an hour, but its longer-term goal is for there to be no minimum wage at all.It is a radical position.
Most years employer groups push for modest increases in minimum wages.
Australia has the fourth highest minimum wage in the world, according to one measure. Unemployment is rising, but is much lower than the wealthy country average.
The idea of a ‘‘living wage’’ has been a feature of Australia’s labour market since 1907.
Then, Justice Higgins decided that wages at the Sunshine Harvester Company in Melbourne had to consider the needs of the ‘‘workman’’ and his family.
‘‘I cannot think that an employer and a workman contract on an equal footing, or make a ‘fair’ agreement as to wages, when the workman submits to work for a low wage to avoid starvation or pauperism . . . for himself and his family,’’ Justice Higgins wrote.
‘‘Or that the agreement is ‘reasonable’ if it does not carry a wage sufficient to insure the workman food, shelter, clothing, frugal comfort, provision for evil days.’’
ACTU secretary Dave Oliver sings a similar tune. He wants a $27-a-week rise in the minimum wage. He attacked the institute, saying: ‘‘Many Australians would find it offensive for executives of the IPA to say our lowest paid workers don’t deserve a wage increase.
‘‘The truth is that productivity is up, wages growth is slow, businesses are enjoying huge profits while workers’ share of the pie is diminishing.’’
Mr Oliver said the minimum wage in Australia was slipping when compared with average wages. He said if the trend continued Australia would have an ‘‘entrenched US style working poor’’ by 2035.