I do not normally like to get political, but reading what Bill Shorten had to say last week regarding the minimum wage, now is the time for me to speak.
At present, minimum weekly wage is approximately $640, after an increase of 3.3% last year, which was above the inflation rate.
Mr Shorten is now proposing the minimum wage be increased to 60% of the median wage. At present, the minimum age is at around 54% of the median wage.
What does this actually mean?
Well, in simple terms, the minimum weekly wage for approximately 2.3 million workers, would increase by around $160-$200 per week, depending on which median figure report you are using. This would make the Australian minimum wage 25-30% higher than any other developed country.
At a time when Australia is struggling to be competitive due to wage demands, and this is fact, not an opinion, why would anyone think this idea is “sound”?
What employers would happily be able to increase salary for those on minimum wage by $150-200 per week? And of course, those earning between $650 and $850 per week, would also now need an increase.
The result would be a reduction in labour hire, and an increase in unemployment. No other economical result could occur.
It is wonderful to have these ideas, but wages come from company profits. Unlike public sector who simply take their payments from the tax payers, private sector pay employees from profits. No profits, no jobs. Simple.
It is accepted that at present many people are struggling with cost of living issues, however, simply increasing wages by this method is not the answer.
Perhaps the $47billion the government, spent on consultants and labour hire in financial year 2016/2017, to do the jobs the public servants are meant to do, could be saved and put to better use.