Minimum Wage & S African Unemployment

Minimum Wage

Among the many important issues which are at present subject to debate in society and the media, there is an inclination to let pass the determination by the Fair Work Commission of the minimum wage. It has received limited attention partly because the body allocated the job of regulating workplace relations has long determined the minimum and even though its analyses have been poor. The FWC has made decisions which have put Australia’s minimum rate at or very close to the highest in the world (over $36,000 pa). But this has not benefited the less skilled because employers cannot afford to pay such a rate for them. Instead of being employed they go on to welfare or crime.

The main advocates of the minimum (trade union leaders) are of course paid well above that minimum but present themselves (wrongly) as “protecting the workers”. They are also accustomed to the regular procedure whereby they announce they are seeking a large increase in the knowledge that the FWC (which is well staffed with ex-trade unionists or supporters of trade unions) will award something less. Employers are usually too scared to announce opposition to whatever is awarded.

As it happens, the National Retail Association has bravely submitted to FWC that there should be no increase on the existing minimum. In my letter published in The Australian on 15 March I argued that the Turnbull government should also favour no increase but it has not said what it should or shouldn’t be. This is a disgrace.

Pay Rises Hurt the weak  

(Letter Published in The Australian, 15 March. Last sentence in brackets omitted)

Your editorial rightly observes that the 7.2 per cent increase in the minimum wage proposed by the ACTU would “no doubt lead to job cuts amongst our most vulnerable workers”(ALP and unions set to pull the wrong levers on wages”, 13/3). And, as Judith Sloan points out, the Fair Work Commission’s contradictory justifications for its past decisions makes it a poor judge (“Until productivity improves, spare us the excuses for a wage lift”, 13/3).

In fact, the HR Nicholls Society has also long argued that the FWC (and its predecessor) has been unfair in effectively ignoring the adverse effects on employment of lesser skilled workers. As a result, FWC decisions cause unemployment to be higher than it  should be and the poorer to bear the brunt.

The Turnbull government should submit to FWC that no increase be made in the present, high wage level. [It should support its submission by pointing to the 26.7 per cent unemployment rate in South Africa, where the union movement sought and partly obtained large increases in the minimum wage].

Des Moore, HR Nicholls Society, South Yarra Vic

South African Wages

The Letters Ed omitted the last sentence in the above letter I submitted, possibly because he/she thought any comparison with South Africa and its large black population is not relevant to Australia. Yet it is relevant to the lesser skilled and the very high rate of unemployment there.  Official South African data indicates that there has been a very large increase in average wages (about 300 per cent since 2004) and that  the “real” rate of unemployment is 36%, about 10 percentage points higher than the official figure.

I thought, however, that there would be some interest in the South African situation given that the election of a new President (Cyril Ramaphosa) has attracted attention in Australia. Ramaphosa has come up through the union movement and is reported to now be the richest man in the country (this is a rather scrappy section on him from Wikepedia, Ramaphosa). South Africa has a strong union movement and a highly regulated wage system (sic) but one which seems to have made decisions with no regard to possible adverse employment effects.

Also of interest for Australia is the considerable number of South Africans and Rhodesians who have emigrated here (about 200,000 S Africans), reflecting in part from the evictions of rural landholders from their land, often carried out violently and sometimes inflicting deaths. On becoming President, Ramaphosa indicated that land reform would be a top priority for him (purportedly to reduce inequality) and it seems likely that more white farmers will lose their land, with increased deaths. I have signed a petition by Q Society in support of additional migrant applicants being accepted (about 10,000 have signed so far). The seriousness of the situation for white farmers is indicated in the two attached articles from The Australian (see under South African Land Grab).

Ironically, the new Rhodesian government is reportedly appealing to white farmers to come back!

The report that the Minister for Home Affairs, Peter Dutton, is considering special visa arrangements for white farmers deprived of their land to come to Australia, and has done so in a way that suggests that South Africa is not a “civilized” country, has caused the SA government to demand a retraction (see South Africa Complains). Turnbull has not specifically supported Dutton but has claimed that we have a non-discriminatory visa scheme. This doesn’t seem to be correct (see also Turnbull on South Africa).

Just what is or is not civilized is hard to determine. But there is no doubt that South Africa is in serious economic and social difficulties, with the black population suffering the most (except for the few having political/union power) and the white landholders facing violent attacks and deaths that are likely to increase. In these circumstances Turnbull should give Dutton full support instead of giving half-backed answers to questions about S Africa and possible visas or admissions. In fact, there is a case for Australia querying at the UN whether its citizens (black and white) are being fairly treated by the government.

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