Earlier this month, federal Labor leader Bill Shorten (pictured) first floated the idea of making the minimum wage reflect a living wage.
The idea was quickly slammed by business groups and many My Business readers alike, as a hike in wage costs without improving the bottom line of employers — particularly small businesses.
Despite the backlash from employers, Labor has pushed on with the idea, and on Tuesday (26 March) announced more details on how its proposal would be implemented.
“A Shorten Labor Government will reverse cuts to penalty rates, boost wages for workers and ensure that the minimum wage is a living wage — fixing the law so that the Fair Work Commission has the tools to deliver a living wage for Australia’s low-paid workers,” Mr Shorten said in a joint statement with shadow Minister for Employment and Workplace Relations Brendan O’Connor.
“A fair go for Australia means a fair wage for working people. Labor’s living wage policy will directly benefit around 1.2 million Australians, or one in 10 workers.”
The duo said that, at present, “everything is going up in Australia except people’s wages”, and that a boost in wages would be good for the wider economy, as low-paid workers spend money “in the local shops and help small businesses”.
Speaking at a subsequent press conference, Mr O’Connor said that the plan would allow Australians to live “decently”.
“We want to see the minimum wage be lifted to a living wage, and for that reason, we’ve announced changes to the law, if elected, that will provide the authority of the Fair Work Commission to examine all of the factors to ensure that people need not live in poverty, to ensure that we have a safety net, one that allows people to live decently, to pay for the bills, pay for the essentials, and not be struggling so acutely to make ends meet,” he said in a video grab posted on his Twitter feed.
“This week, we’ve seen the highest number of Australians needing — needing — more than one job to make ends meet.”
Mr O’Connor also said that underemployment remains a key issue, and that there are “over 1 million Australians that cannot find enough work”.
“The commission will be charged with responsibility to hear submissions from employers, from unions, from experts, from community groups, to define the living wage, and the commission will also be responsible of the timing and the scale of that increase,” he said.
“This is about ensuring that everyone receives the benefits of economic growth.
“This is an important policy, it’s part of an array of policies that Labor has announced, to address job insecurity and address low wage growth.”
According to News Corp Australia, the plan would be delivered “over time” and would focus solely on the minimum wage, and not automatically flow to award rates.