Retailers seek minimum-wage freeze

Labor says an ‘economically responsible’ minimum wage rise would recognise low wages growth and cost of living pressures.

Ms McManus said a $50-a-week increase was needed to address low wages growth, penalty-rate cuts and rising living costs.

National retailers have made an extraordinary call for a freeze on the minimum wage as federal Labor suggested an above-­inflation increase for the nation’s lowest paid.

Labor rejected claims that what the party called a “fair” pay rise would result in job losses as retailers split from business groups, which have backed a rise up to $13.20, to call for zero increase.

The Turnbull government has refused to say whether it supports a minimum-wage rise in its submission to the Fair Work Commission’s annual wage review.

The National Retail Association urged the commission to give “full and genuine consideration” to awarding a zero increase, which would result in a real pay cut if endorsed by the commission.

NRA chief executive officer Dominique Lamb told The Australian it was the first time the association had advocated a pay freeze.

While the Australian Chamber of Commerce and Industry has proposed a 1.9 per cent increase — $13.20 a week — in line with inflation, Ms Lamb said NRA members “are unable to sustain an increase in base wages at this time’’.

Labor workplace relations spokesman Brendan O’Connor said an above-inflation, “economically responsible” increase would recognise flatlining wages, cost-of-living pressures, record levels of household debt, and growing pay inequality.

While declining to specify a dollar amount, he said the minimum wage was no longer a living wage, and the gap between the minimum wage and the average wage had increased.

“Labor’s submission takes into consideration the capacity of industry to pay, but there is a pressing need to restore the link between hard work and fair reward and rebuild the idea that a fairly paid workforce is a more productive workforce in a more profitable business,’’ he said. “The evidence does not support the notion that responsible increases result in job losses.”

The government said the economy was expected to grow at a solid pace this financial year while labour-market conditions had strengthened considerably over the past year.

But it said the youth unemployment rate and the long-term unemployment rate remained at levels substantially higher than before the global financial crisis. It said most international studies into the effects of minimum-wage increases found a mix of negative and insignificant results.

“Risks to employment from increasing the minimum wage are likely higher for youth, long-term unemployed people and those who are low-skilled, as well as other disadvantaged groups, such as indigenous Australians,’’ the submission said.

ACTU secretary Sally McManus attacked the employer claim, accusing business of advocating a real wage cut.

In the biggest one-off dollar-terms rise sought to the national minimum wage, the ACTU has urged the commission to increase the rate from $694.90 to $744.90 a week, equivalent to a 7.2 per cent rise, which unions will seek to flow on to about 2.3 million workers.

Ms McManus said a $50-a-week increase was needed to address low wages growth, penalty-rate cuts and rising living costs.

Australian Industry Group chief executive Innes Willox said awarding the ACTU claim would kill jobs. “The ACTU’s job-­destroying minimum-wage claim of $50 has obviously been plucked out of the air, rather than being the result of a rigorous analysis of economic conditions,’’ he said.