Retailers demand low-paid cop wage freeze

National retailers have called for a 12-month pay freeze to be imposed on low-paid workers for one year.

National retailers have called for a 12-month pay freeze to be imposed on low-paid workers for one year, and the annual minimum wage review decision to be delayed by at least six months.

The National Retail Association, which calls itself the “union for employers”, told the Fair Work Commission the “unprecedented economic crisis caused by the coronavirus pandemic meant no minimum wage rise could be justified for at least 15 months.

The NRA said an increase could not be considered “sound, defensible or well-founded”, and the commission’s expert panel should defer “any consideration of an increase to minimum wages, preferably for 12 months but for a minimum of 6 months, in order to allow a true assessment of the prevailing economic conditions”.

“If the expert panel is of the view that it is not empowered to delay its determination, then the NRA submits that there should be no increase to minimum wages in the present review,” it said.

The NRA said while “some may argue that sections of the retail sector are profiting from recent consumer behaviour”, these were a minority of employers and many of those larger businesses had enterprise agreements and might not be immediately affected by award increases.

But the Australia Institute’s Centre for Future Work said if the commission accepted growing calls by employers for a minimum wage freeze, average private sector wages growth would fall below one per cent.

The centre told the expert panel that without the relatively strong minimum wage increases which have been implemented since 2017, overall wage growth would be tracking at below two per cent.

“If the wage panel accepts the predictable arguments from employer groups that wages should not be increased because of the turmoil associated with the COVID-19 pandemic (on top of macroeconomic and labour market conditions that were already rather dismal), then the only source of reliable wage strength would be removed from the labour market,” it said.

“ Our analysis indicates that if there is no increase in the minimum wage, overall wage growth this year will sink below 1 per cent.

“At a moment when Australia’s overall economy is already teetering on the edge of widespread deflation (with devastating consequences for aggregate demand and financial stability), accentuating deflationary pressures by freezing nominal wages would be counter-productive and highly risky. I

“In our judgment, the wage panel should proceed with a regular, healthy increase in the minimum wage, in line with the long-run objectives of fairness and economic efficiency. That will help the coming multi-dimensional effort to stabilise Australia’s economy and labour market, not hurt it.”

The commission has changed the timetable for the minimum wage review given the economic impact of the coronavirus pandemic. It is taking submissions on an Australian Industry Group call for the decision’s operative date to be delayed by two weeks to July 15 to take into consideration national accounts data released on June 3.

In a submission, the federal government acknowledged the challenges presented to the commission to meet its statutory requirement to complete the wage review by June 30, saying the unfolding pandemic and its economic impact was unprecedented.

Noting the federal budget had been delayed, it said the commission should utilise any available mechanisms to enhance its ability to consider all economic data when making its decision.

It said the exceptional circumstances provisions of the Fair Work Act, if made out, allowed the commission to make the operative date beyond July 1.

Master Grocers Australia, whose members include IGA and FoodWorks, backed the delay in the operative date and reiterated its call for a wage freeze.

“Whilst COVID 19 is the most serious disaster to have affected this country in its history, its impact should be considered together with the previous disastrous effects of the bushfires earlier in the year,” it told the commission.

“The effect on the economy has been, and will continue to be, catastrophic. Thousands of employees have lost their jobs and they will continue to lose their jobs as the impact of the virus continues to grow. The new laws and strategic directions that have been provided by the Federal and State Governments have been welcomed but there is a long way to go before the situation improves and the economy returns to some semblance of normality. In fact the economic impact is expected to take its toll for years to come.”