The Australian Council of Trade Unions today announced it will be pushing for wages to be increased by 5 per cent in the Annual Wage Review.

As financial pressure mounts on Australian workers, the ACTU believes the best thing the Morrison government could do to reduce cost-of-living pressure on Australians would be for them to “support pay increases for Australian workers”. 

“Our annual wage review claim for a 5 per cent increase is what Australians need to keep their heads above water, with inflation and cost of living rapidly rising,” says ACTU secretary Sally McManus.

Recent data released from the Australian Bureau of Statistics shows wage increases are significantly lagging behind the rate of inflation, which is having a negative impact on Australian workers.

Professor Michael Dockery, a researcher and lecturer with the School of Economics and Finance at Curtin University, believes the time is right for a wage increase with inflation currently at 3.5 per cent.

“The cost of living is going to keep going up, so it’s critical wages go up too, or at least keep up with the price rises and rate of inflation.”

Professor Michael Dockery

He says, although wage rises need to be affordable for businesses to handle, the unemployment rate, which is currently at 4 per cent, is low enough to justify the increase.

“As the unemployment rate is so low, I don’t think a wage increase is going to contribute to unemployment in any significant way.”

Professor Dockery believes those on lower incomes should be prioritised to reduce spending waste.

“The issue is that Australia’s wage system for a long time allowed a lot of the wage rises to flow on to higher-income earners. Fortunately, there is a bit more enterprise bargaining these days, so you don’t get [wage rises] automatically flowing on to everybody, which in some cases may be unwarranted.”

The Shop Distributive and Allied Employees Association is one of 38 unions that are part of the ACTU and is the largest private-sector trade union in Australia, with more than 200,000 members. 

SDA WA branch secretary Peter O’Keeffe welcomes the ACTU call for wages to be increased by 5 per cent.

“Real wages have been going backwards for some time, and this, coupled with the recent petrol price shocks and issues with housing/rental affordability, means there needs to be an increase at the lower end,” he says.

Mr O’Keeffe says while the unemployment rate is low, job stability is a significant challenge for members, which is being addressed.

“One of the major issues with the retail industry is under-employment, as the majority of employees are part-time and casual. We can often get their weekly hours increased with another shift which makes a significant difference to their take-home pay.”

Professor Dockery says that while an increase in wages for people on minimum wage is important, ultimately, being employed and not reliant on welfare is far more vital to improving living standards.

“A bit more income is nice, but unemployment ruins lives; it leads to family breaks ups and inequity between families. Declining wealth leads to declining health.”