The case for higher wages

I’m a signatory of a public letter on the benefits of stronger wage growth this morning, organized by the Centre for Future Work. In support of the letter, I said

For decades, government policy has been designed to weaken unions and push wages down. It’s time to put that process into reverse.

A list of all the signers is at this web site: That site also contains a media release that was distributed to reporters this morning, and additional quotations in support

Media coverage of the letter includes:

An article by Stephen Long at ABC: and

An article by Amy Remeikis in the Guardian:

The editors of the AFR mentioned the letter in the course of an editorial reaffirming the virtues of trickledown economics:

And AFR columnist Richard Denniss also mentioned the letter in his column.

You can also look at the Twitter feed for @CntrFutureWork (eg.,

4 thoughts on “The case for higher wages

  1. Doesn’t this letter call for wages to double every 16 years? Was that the previous trend?

    Others are ridiculed for suggesting GDP growth can be doubled with tax cuts and deregulation.

  2. Actually the unions, the bloody ACTU, Kelty et al, did it themselves. They actively helped suppress wages in the interests of trickle down, and cynically took members for granted. They may not have adequately served workers for some time prior, but workers had had enough when they saw themselves clearly sold out repeatedly by union admins only interested in a contest for power by growth through cannibalistic amalgamations increasing their own salaries and sway within the bloody ACTU/ALP alternative universe. Workers then jumped at a chance to desert long term irrelevant useless bastard unions without any more perceived risk to their pay packets than they’d had to put up with already. Then followed the low profile, small target, trickle down, me too years. Now without reflection nor contrition they with the ALP have taken to saying they’re different.
    “In the late 1980s and early 1990s the ACTU was influential in a move to forcibly amalgamate smaller unions into so called “super unions”. The ACTU’s plans envisaged 20 super unions organised on an industrial basis. While a large number of amalgamations occurred in the late 1980s and early 1990s (in part under the influence of changed industrial law), there are still a large number of unions, and union coverage is often organised by historical amalgamation, not by industry.”

  3. Actually the 1980s was a unique period of double digit inflation. This was caused largely by international factors. The wage-price spiral that had set in was driving up wages at an unsustainable rate. The labor government acted in two ways to break this inflation explosion. First they brought in wage indexation to protect lower paid workers. Then they negotiated a Social Contract with the ACTU. This led to the compulsory superannuation that every worker gets today. This was a wage rise trade off. It broke the back of Australia’s wage price spiral. This allowed for a fall in mortgage rates from historically high levels. Without that Social Contract Australia could have gone above its unemployment record rate. Today the wage stagnation workers are experiencing is due to the excessive profits being generated by businesses.

  4. One can legislate higher wages but enforcement is another thing entirely. My partner, who is a wedding dressmaker, hasn’t been paid a legal wage or in most cases superannuation in her 17 years living and working in Oz. As far as I can tell, almost no-one in the dressmaking industry in Oz outside the few remaining large unionised factories gets paid the minimum award wage and very few get superannuation.

    Dressmaking is one of the industries where the internet *does* put downward pressure on wages. This is because folk can order tailor made clothes online and get it shipped to them in one or two months from China or India.

    While the Fair Work Act is supposed to help workers who are underpaid, the reality, as I have since found out, is that former employers can turn vengeful and lawyers charge ~ $500 an hour and the employee (or in this case the husband of the employee!) end up anxious, depressed and popping sleeping tablets. While I ended up getting $75K for my wife in a settlement with her former employer last month, if I had my time again I would have done nothing.

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