Beware pollies bearing pay rise promises

Only a small proportion will benefit, while small business suffers, says Paul Murray

MUCH

of the fight in politics this week has been about wages. Bill Shorten says the next election is a referendum on wages, but he’s not quite telling the whole story about who’s going to get a pay rise if he wins.

Now, I support an increase in the minimum wage. Perhaps it can be permanently linked to inflation. When it goes up, the basic wage does too. But I don’t support union demands for an automatic 10 per cent or $2000 increase as soon as possible. I say this, not because I’m an evil conservative who doesn’t understand how tough things are for those who earn the least. I say this because it’s the smallest businesses that would have to pay it.

Shorten claims business profits have jumped 45 per cent in the last 10 years, but wages have stayed stagnant. This might be true when you look at the whole picture of company profit. But those surges have been enjoyed by huge companies like Woolworths, Coles and mining companies, not the local cafe, cleaning business or motel that are the ones who pay workers the minimum wage.

I admire anyone who starts their own business, they take all the risk, as is the experience of my family members. They employ a couple of people and pay them before they even think about paying themselves.

Small business owners regularly go without a stable regular wage, let alone even thinking about paying for their own superannuation.

They are the ones getting smashed by landlords constantly putting up rent and if they run a shop or little office.

The only thing that’s surged in the past 10 years even close to big business profit is the power bill.

Small-business owners love their employees and take great pride from being able to give someone work. But they also run on a very fine line.

Massive increases in wages will result in fewer hours or even maybe cutting back on staff.

Shorten is great at playing the politics of issues like wages and he’s right about how many people haven’t got a pay rise. But he can’t deliver on a promise of a pay rise for most Australians. Of the 12.7 million people who have a job, only 2.3 million are on the minimum wage.

He and the unions point to recent changes to penalty rates to give even more people a pay rise. But even then, there are only five types of jobs that were affected by the Fair Work Commission changes that saw updates to Sunday pay and public holiday pay. Not the pay for the rest of the week.

The Fair Work Commission said these employees would get time and a half, not double time for Sundays and 5 per cent less for public holidays. So even if this happens, the 300,000 workers covered by these awards aren’t looking at life-changing pay rises. But in the era of the hashtag and the two-second grab on the news, detail doesn’t seem to matter and Shorten seems to care little about the people who will have to find the money for the pay rises.

The problem for an already unpopular government is that as soon as they argue the reality of how limited Shorten’s wages promise is or the detail of who is going to pay for it, they look like they are against more money for the poorest of workers.

So expect the Government to do some dancing of its own. But either way, beware of politicians promising pay rises, because about 75 per cent of workers aren’t going to get one.