Labor urged to broaden living wage policy

Opposition leader Bill Shorten says an elected Labor government will introduce a living wage so no full-time worker lives in poverty, but community leaders say unemployed workers and people with disability must be included in the policy as well.

Shorten and shadow employment minister Brendan O’Connor announced the wage plan on Tuesday, which involves a two-step process to reduce blowback from the business community.

“A living wage should make sure people earn enough to make ends meet, and be informed by what it costs to live in Australia today – to pay for housing, for food, for utilities, to pay for a basic phone and data plan,” Shorten said.

Under the plan, the Fair Work Commission would consult with stakeholders including businesses and unions to determine what a living wage should be, considering other factors such as the amount of tax paid, welfare payments and the cost of living.  

The commission would then examine how and when the living wage could be implemented, taking into account the ability of businesses to pay, and the impact of the change on employment and the economy.

Shorten said the commission’s highest priority would be making sure no person working full-time in Australia needed to live in poverty, and noted a living wage would benefit 1.2 million workers.

“We will fix the law so that the Fair Work Commission has the tools to deliver a living wage for Australia’s low-paid workers,” he said.

“Along with reversing the cuts to penalty rates, this sensible change will be good for workers and good for the economy.”

The idea of a “living wage” is catching fire: no-one working full-time should be in poverty. It’s realistic & ethical–and it would strengthen Australia’s economy. Here’s our list of 8 things to know about the living wage: https://t.co/bsk6nnfTqP. #ChangeTheRules @unionsaustralia pic.twitter.com/zKtxVbS4G1

— Centre for Future Work (@CntrFutureWork) March 24, 2019

The announcement has been met with some skepticism within the social sector. Matthew Bowden, co-CEO of People with Disability Australia, told Pro Bono News the disability community needed to be included in any action on low wages.

He noted Labor has previously supported Australian Disability Enterprises (ADEs) as a way to provide dignified work for people with disability locked out of employment, despite concerns workers were paid as little as $1 an hour.

“We hope to see any push to raise wages includes people with disability, including people with disability who work in ADEs. No Australian should be working for a few dollars an hour,” Bowden said.

“We believe that people with disability need pathways out of poverty and into mainstream employment. This includes being paid a fair wage for our work. Any push for a living wage must include fair and living wages for people with disability.”

PWDA on Tuesday released a federal election platform calling for a National Jobs Plan for people with disability.

Greens Senator Rachel Siewert has also called for unemployed workers to be included in a living wage plan, arguing these people were forced to live in poverty on Newstart payments as low as $40 a day.

“It’s time that we recognised that unemployed workers are workers too,” Siewert said.

“We need to change the law so that if you work full-time, you’re not in poverty and if you’re out of work you’re also not living in poverty.”

She said the ALP could not say they were committed to lifting people out of poverty if they weren’t committed to increasing Newstart urgently.

Newstart recipients & unemployed workers can no longer be excluded from the “living wage” conversation. it’s completely unacceptable, @billshortenmp https://t.co/vMYDCY868m

— jeremy poxon (@JeremyPoxon) March 25, 2019

This call was echoed by the Australian Council of Social Service, whose CEO Dr Cassandra Goldie said a living wage must be partnered with an increase to Newstart to effectively reduce poverty and boost the economy.

“Both an urgent $75 per week rise in Newstart and a substantial rise in minimum wages are the fundamental steps we must take in any serious effort to reducing poverty,” Goldie said.

“We need [the government to] play their part for people on the lowest 40 per cent of incomes – both people relying on income support and wage earners, who in reality are often the same people at different stages of life, sometimes week to week.”

Labor’s policy would only apply to those on the ­national minimum wage – currently $18.93 an hour and $719.20 for a 38-hour week – and not for those on other award wages.

Social Services Minister Paul Fletcher attacked Labor’s announcement, warning it was likely to make poverty worse not better.

Fletcher said the plan could force employers to hire fewer people, hitting low-skilled workers and Australians trying to move from welfare into work the hardest.

“Nine out of 10 jobs are in the private sector – and if a private sector business cannot afford to hire a person who is looking for a job, then the reality is that person will stay unemployed,” Fletcher said.

“The best way to reduce poverty in Australia is getting more people into work. Mr Shorten’s policies will have the opposite effect and in turn lead more people into poverty.”