Page 523 - Week 02 - Wednesday, 21 February 2018
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Following the Fair Work Commission’s diabolical decision to cut penalty rates, a number of talkback callers noted that many employers were not paying them anyway. Callers pointed to the fact many employers were paying their teenage children cash in hand, under the table payments to avoid paying penalties. The argument goes, “If I don’t, the bloke next door will undercut me and it hurts my business.” But at what point do we say no? At what point do we say to someone, “You no longer have the right to carry on your business in this way”? At what point does a worker’s right to a fair wage outweigh an entrepreneur’s right to carry on a concern?
In Australia the Harvester case set the standard that an employer must pay its workers a fair and reasonable wage which met the normal needs of the average employee. Justice Higgins ruled in 1907 that a worker must be paid at a minimum enough to support a household budgets with allowance for things such as lighting, clothes, furniture, rates, insurance, savings, loss of employment, union pay, books and newspapers, tram and train fares, and school expenses. It even suggested allowance be made for amusements and holidays, intoxicating liquors and tobacco. The ruling dominated the following 80 years of Australian labour law and made Australia one of the first countries in the world to pay a living wage.
While this case set in place the system of arbitration that would form one of the pillars of the post-settlement economic consensus in Australia up until the 1980s, it is more the principle laid down in this ruling that is important. This was the principle that in Australia if you could not or would not pay your workers enough to ensure a dignified existence you had no right to carry on business. Justice Higgins enshrined this belief in the judicial system with a series of rulings. Perhaps the most prominent of these came in 1909 when Higgins stated:
If it is a calamity that this historic mine should close down, it would be a still greater calamity that men should be underfed or degraded.
That may sound extreme to some, but to put it in context, the company involved in this dispute was BHP, and 109 years later it seems to be going reasonably well regardless of that decision.
While the Higgins decision set the tone for nearly 80 years, the last two or three decades has seen an about-turn in the way we approach wages. Where once the system of arbitration embodied our dedication to wage justice and equity, it seems now our pre-eminent concern is to lessen the burden wages place on business. “If we could just lower penalty rates, we could unchain the shackles we’ve placed upon business.” “If only we free up the resources that are tied up ensuring workplaces comply with their obligations to employees.” It is a similar argument that we hear from the federal colleagues of those opposite in regard to company tax: “If only we lowered company tax, rivers would flow with gold and raise the tide for everyone.”
However, after three decades of these apparent rising tides, it seems we may not be achieving what was promised. Wage growth is at record lows. Income inequality is at 70-year highs. Underemployment has suddenly become a genuine problem for us to
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