Union supporters rally outside the offices of the Fair Work Commission in Melbourne. Picture: Joe Castro/AAP
Union supporters rally outside the offices of the Fair Work Commission in Melbourne. Picture: Joe Castro/AAP

‘Low-paid work provides dignity’

EXCLUSIVE

Low-paid work "provides dignity" and is an "important first rung of the career ladder", according to a document distributed to MPs calling for the minimum wage to be scrapped.

The parliamentary research brief distributed by conservative think tank the Institute of Public Affairs (IPA) argues Australia's minimum wage of $19.49 an hour is the highest in the developed world and "undermines work opportunity and job creation" by "removing the entry rung" for young and low-skilled workers.

"Low-paid work equips workers with important experience, builds transferable skills, demonstrates a willingness to work and provides references and contacts for future work opportunities," the paper says. "It also functions as a starting point for young people to experience the dignity of work that provides meaning and direction and fosters personal responsibility and independence."

Using data from government submissions to the Fair Work Commission's Annual Wage Review, IPA research fellow Kurt Wallace calculated nearly two-thirds of minimum wage workers moved to higher-paid work within two years and just 3 per cent remained in low-paid work after five years.

"Contrary to suggestions that low-paid work is a 'dead-end job', these jobs have high upward income mobility," Mr Wallace said in a statement. "Over half of low-paid Australian workers move to higher-paid work within a year, 64 per cent move to higher-paid work within two years and 75 per cent move to higher-paid work within five years."

Mr Wallace added, "Australia's stringent labour regulation significantly raises the cost of employment, making it difficult for those who lack experience to find work. The superannuation system and leave entitlements alone increase the minimum wage to $25.34 per hour worked."

The World Economic Forum ranks Australia the 105th least flexible labour market out of 140 countries. The IPA argues the minimum wage is a large reason 38 per cent of 15 to 19-year-olds are either unemployed or underemployed and an estimated 250,000 Australians aged 15 to 24 are not engaged in work, study, or caring for children.

 

ACTU secretary Sally McManus has slammed a move to abolish the minimum wage. Picture: Joe Castro/AAP
ACTU secretary Sally McManus has slammed a move to abolish the minimum wage. Picture: Joe Castro/AAP

"All work provides dignity, skills and financial independence," Mr Wallace said. "Low-paid work is an important rung toward higher-paid work and career success. Australia's high minimum wage and restrictive labour regulation undermines the ability of young people to enter the workforce and experience the dignity of work."

An IPA spokesman added the think tank did "not believe there should be a minimum wage". "It is not a policy which is well targeted at alleviating poverty - most who are on the minimum wage are not poor," he said. "And it prevents the lowest skilled from getting a job. Instead governments should explore alternatives such as earned income tax credits."

Australian Council of Trade Unions secretary Sally McManus slammed the research. "The proposal by the extreme big business advocates at the IPA to abolish the minimum wage is appalling, dangerous, but predictable," she said in a statement.

"This group believes that workers should have no rights or protections and our society should be run solely according to the wishes of big business. At the same time, former and current IPA members who are Liberal MPs are also pushing for the removal of unfair dismissal protections."

Ms McManus said Prime Minister Scott Morrison and Industrial Relations Minister Christian Porter should "publicly reject any suggestion that minimum wages or unfair dismissal protections should be abolished and stand up for working people".

"Should they not do this, it will be clear that they are allowing extreme groups like the IPA to drive their agenda," she said. "Ideas like this are fundamentally unfair and would drive our country into recession. The only thing keeping wage increases in line with inflation are our minimum wages system and the pay rises won by unions."

More than two million Australians got a pay rise at the start of last month after the Fair Work Commission's 3 per cent increase to the minimum wage took effect. Unions were pushing for a 6 per cent increase at the Annual Wage Review in May, while business groups wanted 2 per cent.

Mr McManus said the IPA was using the Morrison Government's shock election victory as an "opportunity to once again push their extreme agenda".

"They have a list of demands which over six years the Coalition government has been ticking off, but they're not done," she said. "The Morrison Government has given them this soapbox with the announcement of a review of workers' rights. It is up to them to make clear they will not be entertaining any proposal that makes workers worse off."

Should the minimum wage be scrapped? Tell us in the comments below.

 

frank.chung@news.com.au



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