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ACTU push for increase to minimum wage by $30

Wednesday, 27 March 2013 | By Yolanda Redrup

The Australian Council of Trade Unions is continuing its push for the minimum wage rate of workers to be upped to $636.40 a week, an increase of 5%.


The Australian Financial Review reported today the peak union body is arguing the minimum wage has fallen from 50% of the average wage in the year 2000 to 43.4% at current.


ACTU secretary Dave Oliver was quoted as saying "any further decline in the relative living standards of low-paid workers will put in jeopardy the concept of a fair safety net of minimum wages for people whose work is crucial to Australia's economy."


Last year, the Fair Work Commission decided to increase the minimum wage rate by 2.9%, but Oliver says this was disappointing and "pushed us further towards the creation of an American-style class of working poor in Australia".


SmartCompany contacted the ACTU but received no comment prior to publication.


Council of Small Businesses of Australia executive director Peter Strong told SmartCompany an increase in the minimum wage is unsustainable for small businesses.


"Well the obvious thing is it adds complexity, decreases profits and it's something decided based on the thought we can afford the increase in costs, when we can't.


"We don't want to pay workers lousy wages, but we cannot afford an increase of $30 a week. It would result in smaller profits and place further pressures on small business. The impact on big businesses like Coles and Woolies is nothing, but on us it's quite large," he says.


The push comes as research reveals Australia's top earners are not having as great an impact on wealth disparity and inequality as the federal government and worker's unions would have society believe.


A Productivity Commission Staff Working Paper into the trends in the distribution of income in Australia published this morning shows, on average, income has increased by 3.5% annually for the past two decades, substantially above the OECD country average.


The report found the rate of income growth for individuals and households at the 'top end' have increased more than the 'bottom end' and incomes for those in the middle range have greater variation than two decades ago.


The commission's analysis states these factors underlie research which suggests inequality in household incomes is increasing. But the report also found the top 1% of earners are now having a smaller impact upon inequality levels than before.


"The top 1% have not been relatively more important in explaining movements in labour income inequality compared to other earners. Rising inequality in Australia is also driven by the 99%, not just the 1%," the report states.


The report also found Australia's tax system is efficient in distributing wealth, with the highest income earners paying the highest taxes.


The report finds the increases in income have been predominantly generated by a rise in employment rates, longer working hours among part-time workers and increases in real wages.


Since 1988-89 average incomes rose by 38% to around $800 per week to $1,110 per week in 2009-2010 in dollar terms.


When taking into account other financial factors such as direct government payments, the provision of government-funded services and taxes, and taking into account household size and composition, the "equivalised" income increased by 64% in the 20 years.