Safeguarding jobs must be Fair Work’s main priority

The employment statistics for April were sobering enough, with almost 600,000 jobs lost and 490,000 workers exiting the labour market. But the survey was taken a month ago, so the headline unemployment rate of 6.2 per cent doesn’t yet convey the carnage in the real economy from the policy-induced shutdowns to slow the rate of new coronavirus cases. More telling were figures for total hours worked last month, which slumped by 9.2 per cent from March. The under-utilisation rate — taking in the unemployed and those who’d like to work more hours — is at a record high of 19.9 per cent or around 2.7 million Australians. Scott Morrison called it a “tough day” for the nation, while Josh Frydenberg warned that over winter “the economic numbers will get worse before they get better”.

The human toll would be higher without the Morrison government’s emergency doubling of the JobSeeker payment and the new JobKeeper wage-subsidy scheme, at a mammoth cost of $130bn, with 860,000 businesses enrolled. So far six million employees are covered. But Labor claims there are hundreds of thousands of people in dole queues because of a “deliberate act” of the Coalition and its “bungling” of JobKeeper. The program is a new political fault line in Canberra, as well as an arena for a fight between capital and labour. Employers have accused trade unions of telling members not to nominate for the $1500 a fortnight scheme so they can circumvent temporary changes to the Fair Work Act, such as issuing stand-downs with less notice and working fewer hours or at a different location. That flexibility is keeping employees tied to employers, accelerating the recovery. Gaming the rules is counter-productive.

As well, lifting social distancing restrictions in line with the three-stage process designed by the national cabinet will progressively boost activity. Treasury estimates that by July, all things going plan, the reopening of the economy will be worth $9bn a month and will see 850,000 people back at work. Endangering that uplift, however, is the outrageous claim by the ACTU to lift the minimum wage by $30 a week or 4 per cent. Unions argue it would drag the economy out of recession and boost consumer confidence. But doing so in the middle of the deepest commercial malaise since the Depression would be a job killer and push distressed small businesses to the wall. We already have the highest minimum wage in the world. Every student of the dismal science knows that pushing up the cost of something isn’t going to stimulate demand for it but will sedate it.

As workplace editor Ewin Hannan reports, pay rises for two million low-paid workers could now be delayed as Fair Work Commission President Iain Ross considers deferring or staggering minimum wage rises because of the economic shock from COVID-19. The law requires a decision by the industrial umpire to make an annual national minimum wage order that comes into effect from July 1. But in exceptional circumstances or in cases of economic incapacity the commission can make multiple determinations for some or all employees from a later date or dates. As the commission’s staff wrote in a new discussion paper, the industrial umpire has discretion to exempt some employers and employees from modern award minimum wage increases or to reduce the amount of the increase for some employers and employees. Let’s see some pragmatism.

In our present miasma and misery, that approach is prudent and necessary. Industrial Relations Minister Christian Porter argues the absolute priority for the commission should be preserving jobs. “So that when we come out of the health response we’ve got as much of the architecture of the Australian economy left as we can preserve, to regrow, rebuild and get government out of the economy,” he said. We think the ACTU’s claim is manifestly excessive and would jeopardise the viability of businesses, especially in retail and hospitality. Unions should trade off wage rises for jobs. Official forecasts show gross domestic product is likely to shrink by 10 per cent this quarter, with the number of hours worked dropping by 20 per cent. An 80 per cent economy won’t generate the profits or dynamism we need to restore living standards and productivity growth, nor will it entice companies to expand, invest, innovate or hire workers. To get people back in jobs, we must ease restrictions, enhance workplace flexibility and lower cost overheads for a competitive baseline.