Opinion: An increase in wages sufficient to prevent a further fall in real wages would do little harm to the economy and much good to businesses hoping their sales will keep going up rather than start going down, writes 1RossGittins
An increase in wages sufficient to prevent a further fall in real wages would do little harm to the economy and much good to businesses hoping their sales will keep going up rather than start going down.
No one younger than a Baby Boomer could possibly delude themselves that workers could simply demand some huge pay rise and keep striking – or merely threatening to strike – until their employer caved in and granted it. Julia Gillard’s Fair Work changes in 2009 reversed some of the more anti-union elements of Work Choices but, as part of modern Labor’s eternal desire to avoid getting off-side with big business, let too many of them stand.
The claim that Lowe has stopped the union madness in its tracks by imposing a “3.5 per cent cap” on wage rises misrepresents what he said. It ignores his qualification that 3.5 per cent – that is, 2.5 per cent as the mid-point of the inflation target plus 1 per cent for the average annual improvement in the productivity of labour – is “a,” and is the “steady-state wage increase”.
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