Should you strike for higher wages?

Ross Greenwood speaks to Australian Chamber of Commerce and Industry CEO James Pearson about calls to raise Australia’s minimum wage and if industrial strike action can get the result the workers want

Ross Greenwood:  Tomorrow you’re going to see a strike action that will take place against Telstra, but also against Chemist Warehouse. Now, there’s no doubt that both of those are right now in the midst of some pay negotiations with their staff. Telstra, as you may be aware, has got a stated policy right now trying to cut around a third of its workforce. The reason for that is because, without having the massive broadband network that they previously had that it sold off to NBN Co., it needs to downsize to become more efficient.

However, as you can understand, wages would be fairly suppressed in that organization, but they have been targeted by unions in what appears now up to the election, The Federal Election, to be a concerted action by unions to try and seek higher wages. Now, we know a lot of people really right now are probably– Well, they’re a bit squeezed up because wages have not grown as quickly as they had previously. I just thought we try and bring in here the Chief Executive of the Australian Chamber of Commerce and Industry, James Pearson, just to try and explain exactly what is taking place in the background. James, many thanks for your time.

Interview with: James Pearson, CEO, Australian Chamber of Commerce and Industry

James Pearson: Good to talk to you again, Ross.

Ross Greenwood:  This appears to be a concerted effort by unions to try and bring some flavor of what the industrial relations scene might look like either if the Labor government is elected.

James Pearson: Look, when we called unions out to unions like this year. Some people are putting two and two together. There’s no doubt that we make and we need it as soon as possible on what an alternative Labor government will mean for workplace relations in Australia. What sends shivers down the spine of a lot of my members who are mainly in small businesses was last week and again at the weekend when the Labor opposition appeared to be saying that it was endorsing the concept of a living wage, which is something that the big union boss over at the ICTU has been pushing towards.

That is such as a large increase in wages in Australia. You’d see employers right around the country paying as much as almost $9 billion extra a year without any increase in productivity whatsoever. How they could afford that, I don’t know.

Ross Greenwood:  Is it already correct that Australia has got one of the highest minimum wages in the world today?

James Pearson: Australia has the second highest minimum wage in the world, beaten only by Luxembourg. Actually, for a little while there, last year we had the highest minimum wage. We’ve been neck and neck first, or second, or third over the last few years. An important detail too is, when minimum wages go up, and the last year they went up by 3.5%, well above inflation, which is 1.8%, they’ve gone up above the cost of living for every year for the last nine years.

It’s not just the 200,000 working Australians on a minimum wage, it’s actually the 2.3 million Australians who work on award wages because those increases closer to all of those wage package.

Ross Greenwood:  That being the case they’re now pushing because they believe that members are not getting proper wage rises, the truth of the matter is that wage rises, on average, still, end up being relatively close, if not greater than the inflation. That means, in real terms, many people’s wages or most people’s wages are at least keeping up with inflation even if they’re not getting two or three times inflation. Perhaps it might take a little bit of pressure off.

James Pearson: Well, what you’re saying is absolutely right. Now, I understand that lots of people are feeling that the wage rises that many of us used to enjoy during the golden days of the mining boom, well, we’re not getting those at all because, as a country, we’re actually not being as productive and not creating much wealth or capital as we were then. You don’t solve that by forcing employers, businesses who can’t necessarily afford it to increase wages with nothing in return.

One of the things that worries my members, Ross, is that that whole debate about productivity, this long-accepted idea that, well, if you can increase your productivity, then you can get a wage rise in proportion. That idea seems to have been thrown out of the window by unions.

Ross Greenwood:  This now concerted rolling coverage that you’re going to see of ongoing or either strike actions or demonstrations, you remember their day of action? They want some 250,000 workers to come out of the streets around their capital cities. Just explain what messages that send to the community, do you do believe?

James Pearson: It’s sending entirely the wrong message. Right now, people want more hours of work and people without a job want just that, a job. If we’re going to have demonstrations all over again right across the country demanding increased wages when not all businesses have the capacity to pay, well, look, what that means, really, is one person’s wage rise is going to cost another person a job. That’s not what I want to see. I doubt that’s what most Australians want to see either. I’d want to see a return to collaboration rather than confrontation on Australian workplaces.

Ross Greenwood:  You’re tuned here on program, the chief executive of the Australian Chamber of Commerce and Industry, James Pearson. Please be aware of what you’re about to see. You’re about to see a concerted effort by the ICTU, in particular, to try and make a lot of noise about what they claim is unfair wage rises, even though, as you’ve heard, the wage rises broadly have kept up with inflation rate over a long period of time. Indeed, the minimum wage in this country is the second highest in the world today. James Pearson, we appreciate your time.

Ross Greenwood:  Thanks, Ross.

Image source: 2GB

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