As the Fair Work Commission prepares to announce this year’s increase in the national minimum wage, new polling data shows that the vast majority of Australians support lifting wages to keep up with rising inflation.

The Australia Institute conducted a special exit poll, surveying a nationally representative sample of 1,424 Australians on the evening of Saturday May 21, following the federal election. Among other questions, the survey asked about voters’ attitudes towards cost of living and low wage growth.

Key Findings:

• An overwhelming majority of Australians (83%) support wage increases that keep up with cost of living, only 10% disagree.
  • Strong support for boosting wages to keep up with inflation was expressed across all voting intentions (Coalition 79% agree, 13% disagree; Labor 88% agree, 8% disagree; Greens 83% agree, 11% disagree; PHON 70% agree, 14% disagree; IND/other 84% agree, 7% disagree.)
• In this context, criticism directed at Mr. Albanese during the election campaign for agreeing that wage increases should keep pace with inflation more likely hurt the Coalition campaign, not the Labor leader.
  • 39% of respondents felt Labor was best placed to address the issues of wages and the cost of living, compared to 26% who felt the Coalition had the stronger position.
• Almost two in three Australians (65%) believe their nominal incomes have lagged behind inflation in the past year.
  • Regarding what can be done to ameliorate this problem, Australians were evenly divided: about half of respondents believe government policies can significantly alter the course of wage growth, while the other half do not.

“Our research shows that while conservative commentators might be alarmed at the idea that wages should increase as fast as prices, among the voting public the idea seems reasonable and fair,” said Dr Jim Stanford, Economist and Director of the Centre for Future Work.

“There is no economic basis for the view that wages keeping up with inflation will only cause further inflation. The current cost of living crisis is clearly due to factors (like supply chain disruptions and global energy prices) that have nothing to do with Australian wages.

“Unit labour costs in Australia are falling, not increasing. Workers should not be punished further with falling real wages for a problem they did not create.

“Wages can and should keep pace with rising prices to protect the real living standards of Australian workers, while the true causes of inflation are addressed.”

Almost one in five Australians (and a higher proportion of young workers) acknowledge working with potential COVID symptoms over the course of the pandemic, according to new opinion research released today by the Australia Institute’s Centre for Future Work.

The research confirms the public health dangers of Australia’s patchwork system of sick leave and related entitlements, as new ABS data released today indicates 32% of Australian households had one or more members exhibiting COVID symptoms in April.

Key Findings:

• More than one in three (37%) employed Australians have no access to statutory paid sick leave entitlements (including workers hired under casual employment arrangements, and self-employed workers). Another 12% had access only to pro-rated part-time entitlements.
• When the pandemic hit Australia, therefore, barely half (51%) of employed workers could count on regular full-time income if they had to stay home from work.
• Almost one in five respondents (19%), and a higher proportion of young workers (29%), acknowledged working with potential COVID symptoms at some point during the pandemic. This highlights the public health dangers of Australia’s patchwork system of sick leave and related entitlements.
• Polling results also confirm that a significant proportion of workers (17%) also attended work after exposure to someone possibly infected with COVID.
• Given inadequate sick pay entitlements and the surprising share of workers attending work in violation of public health advice, perhaps it is not surprising that 18% of workers did not feel safe attending their normal workplaces during the pandemic.
• Australia’s sick pay entitlements are clearly inadequate to allow workers to stay home from work when health advice requires it. The expansion of non-standard and insecure forms of work (including part-time work, casual jobs, contractor positions, and ‘gigs’) has heightened concern that many workers do not have the effective ability to stay home from work for health reasons.
• Government should expand sick pay entitlements to cover all workers, and also implement strategies to limit and reduce the incidence of insecure work: including by constraining employers’ use of ‘permanent casual’ arrangements, sham contracting, and on-demand gigs, none of which provide normal and healthy paid leave entitlements.
• Unfortunately, the current Federal Government has done the opposite by reinforcing the shift toward insecure working arrangements – including through its 2021 amendments to the Fair Work Act, which cemented and expanded employers’ rights to hire workers on a casual basis (with no sick pay) in virtually any job they wish.

“Our research shows that too many workers are not following public health guidelines and isolation instructions, to the detriment of their own health, and the health of their colleagues and the broader community,” said Dr Jim Stanford, economist and director of the Australia Institute’s Centre for Future Work.

“Millions of workers have either used up all the paid sick leave they are entitled to, or do not receive sick pay entitlements in the first place. There is no doubt this has contributed to the epidemic of people attending work with possible COVID symptoms.

“With incomplete sick leave coverage, workers face a devil’s choice: between staying home to protect themselves, their colleagues and the public; or going to work regardless simply to make ends meet.

“The policy implications of this analysis are clear. The government needs to expand sick pay entitlements to cover all workers, including those in casual employment and self-employed situations.”

A comprehensive review of Australian wage trends indicates that wage growth is likely to remain stuck at historically weak levels despite the dramatic disruptions experienced by the Australian labour market through the COVID-19 pandemic. The report finds that targeted policies to deliberately lift wages are needed to break free of the low-wage trajectory that has become locked in over the past nine years.

The report, The Wages Crisis: Revisited, authored by three of Australia’s leading labour policy experts: Professor Andrew Stewart from Adelaide Law School, Dr Jim Stanford from the Centre for Future Work, and Associate Professor Tess Hardy from Melbourne Law School, updates analysis and recommendations from their 2018 edited book, The Wages Crisis in Australia.

The report shows that annual nominal wage growth recovered after initial lockdowns during the pandemic – but rebounded only to the same slow pace (just above 2% per year) recorded for several years prior to COVID. Unprecedented fluctuations in employment and labour supply, including a significant decline in the official unemployment rate, do not seem to have altered wage growth, which is still tracking at the slowest sustained pace in post-war history.

“It is striking that despite so much turmoil in our labour market during and after the pandemic, wage growth is still stuck at historically weak rates,” noted Professor Andrew Stewart.

The research found little correlation between the lasting slowdown in wage growth after 2013, and changes in supply-and-demand balances in the labour market.

“Traditional market forces did not cause the wages crisis, and market forces are unlikely to be able to fix it – even with a relatively low unemployment rate,” said Dr Jim Stanford.

Instead, the authors identified nine policy and institutional factors which were more important in explaining the deceleration of wages, including: the erosion of collective bargaining coverage; inadequate minimum wages; pay restraint imposed on public sector workers; and widespread wage theft.

The problem of restrained compensation in public and human services reaches further than just the pay caps imposed directly on public servants. Wages in publicly funded services (like aged care, the NDIS, and early child education) are also held back by inadequate funding and weak labour standards in those programs.

The report makes special mention of the need to improve wages in aged care, in the wake of the recent Royal Commission’s finding that wages in the sector must be improved as a top priority in improving care standards and attracting the new workers the sector needs.

“A combination of underfunding, outsourcing, and precarious employment has suppressed wages for some of the most important jobs in our economy,” commented Associate Professor Tess Hardy. “The Aged Care Royal Commission identified this problem, and directed government to solve it, but so far the government has done nothing to improve wages.”

The authors suggest that nominal wages should grow faster than 4% per year in coming years, to restore healthy relationships with productivity growth, inflation, and national income distribution. But a resuscitation of wage growth will not occur without proactive wage-boosting policies.

The authors list five broad measures to quickly support wage growth. One is a proposal for a new statutory definition of employment. This would prevent businesses from drafting contracts that present workers as being self-employed, even if in reality they have no business of their own. The authors predict that such arrangements will become far more widespread, including in the growing gig economy, in the wake of two recent decisions by the High Court.

“The High Court has said that employment status has to be determined by what your contract says, not what you actually do. That opens the door to much wider use of contractor models, even when the actual conditions of work clearly indicate an employment-like relationship”, said Prof Stewart. “Without urgent action to prevent minimum wage laws being avoided in that way, the negative impacts on wages will steadily become much worse.”

The next federal government can save universities, make undergraduate education free for all Australians and employ tens of thousands of staff securely by lifting the public spend on higher education to just one per cent of GDP, according to a landmark new report.

The Australia Institute’s Centre For Future Work report shows, if the federal government brings its annual investment in higher education into line with the OECD average, we could fix the destruction inflicted by the COVID pandemic and make universities more accessible and affordable for all Australians.

Following decades of funding cuts, government inaction and the pandemic, more than 40,000 jobs were lost in public tertiary education in the 12 months to May 2021, 35,000 of those at public universities.

National Tertiary Education Union (NTEU) National President Dr Alison Barnes said “Higher education needs to be made a priority in this election. The future of hundreds of thousands of staff and millions of students depends on it.

“The state of the sector now is deeply concerning. It is the consequence of the Morrison Government’s decision to exclude universities from JobKeeper, hike student fees, cut funding per student place, entrench casualisation and decimate curiosity-driven research funding.

“Thousands of jobs have been lost at public universities and the staff who are left are being kept on casual or short-term contracts. Those staff can’t plan for their future and often have their pay stolen by money-hungry universities who have built their business models on wage theft and insecure work.

“The next Australian Government could remove the financial barrier to higher education, employ more than 26,000 staff in secure full-time jobs, restore research funding, reduce the over-reliance on casual staff and establish a new higher education agency to improve governance.

“Free undergraduate education would be transformative for current and future students who are now facing more expensive degrees, mounting student debt and even the threat of being kicked off HECS if they don’t pass their courses.”

Australia Institute economist and the report’s author Eliza Littleton said “As devastating as the pandemic has been for Australia’s universities, the sector was being distorted and damaged by corporatisation, casualisation, and privatisation long before COVID arrived.

“Australia needs an ambitious national vision for higher education that re-aligns the sector with its public service mission, and with the needs of students, staff, and wider society.

“Australia can choose a future for higher education that facilitates a stronger economy, social mobility and enhanced democracy – all the while generating a source of high-quality careers for many thousands of Australians.”

The report’s recommendations include: 

• Free undergraduate education for Australian students
• Adequate public funding for universities
• Fully-funded research
• Measures to ensure secure employment
• Improved higher education governance
• Caps on vice-chancellor salaries; and
• Transparency in data collection.