AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Wages are a highly influential aspect during elections, prompting most leaders to advocate for a hike in wages.
- PM Scott Morrison’s latest statement that a decent wage hike could be harmful to the domestic economy has sparked various discussions.
- ACTU has revised its Annual Wage Review claim from 5% to 5.5%.
In a world where political leaders champion a rise in wages, the Morrison government has taken an unconventional and controversial stance. Wages form an essential part of the economy and are a highly influential aspect during elections. Voters are expected to choose the party which can help stimulate a wage hike in the country.
Experts have time and again flagged the less-than-sufficient rise in wages growth in Australia, which has been worsening affordability problems across many sectors. Inflation has leapt by a considerable amount, with the latest data by the Australian Bureau of Statistics (ABS) showing that the annual inflation rate is 5.1%. However, wages growth lags far behind and is considered sub-par compared to the strikingly high inflation rate.
Early voting polls open from May 9th
The elections present the perfect opportunity for political leaders to develop faith in their voters about how their party would be beneficial for the masses. Voters are highly critical of the stance taken by leaders regarding their wages. In such a scenario, advocating for anything other than wage growth can be an extremely daunting event.
ALSO READ: Will rising power bills impact Morrison Govt's re-election bid?
PM Morrison’s stance on wage hike
In a highly damaging statement for the Coalition’s election campaign, PM Morrison recently stated that a decent rise in wages can be a terrible idea for the economy. The statement alone can have severe consequences on the public’s opinion of the Morrison-led party. Ideally, calling wage growth harmful could affect his votes during the upcoming election.
PM Morrison believes that a rise in wages could further raise the inflationary pressure seen in the economy. However, his statement is sharply in contrast to the general opinion. A rise in wages is likely to be the public’s last straw in a high-inflation environment. Even the ABS has stated that wages need to match pace with inflation for the economy to avoid plunging toward a slowdown.
On the contrary, Labor has inadvertently received a boost to their election campaign from PM Morrison’s controversial stance. Labor is deemed as the party of the workers, which means their support for wage growth has become even more impactful after PM Morrison’s statement. Meanwhile, the recent turn of events appears to have enhanced the Labor’s claim to the throne. Further, Labor’s image as the party of the workers could strengthen people’s belief that it will spend more on distributing government services.
RELATED READ: Why are millions of Aussies voting before election day?
Calls for wage hike
Wages growth is the dire need of the hour as Australians face a major financial crunch in the wake of a worsening affordability crisis. The Australian Council of Trade Unions (ACTU) recently revised its Annual Wage Review claim from 5% to 5.5%, given the rising cost-of-living pressures.
According to The Fair Work Commission, the National Minimum Wage is AU$20.33 per hour or AU$772.60 per week. The ACTU submitted its initial claim of a wage hike when Scott Morrison had just announced the budget, which forecasted a wage growth of 4.25% in the middle of this year. However, ABS data suggests that inflation has reached 5.1% annually, causing much stir among workers.
Meanwhile, industry leaders are suggesting wage hikes of 2-3% and not beyond, which is cause for concern. PM Morrison’s claims could further give impetus to the disapproval of a wage rate hike by industry leaders. The government might have to award a rate hike which lies somewhere between the workers’ expectations and the industry’s set lower limit.
Swiping in at the perfect moment, Labor leader Anthony Albanese has stated that people already under the stress of rising prices should not have to suffer the consequences of a fall in wages. Alternatively, the Australian Chamber of Commerce believes that any increase of 5% or more could be harmful to small businesses.
Overall, Scott Morrison’s fear surrounding a rise in inflation due to a wage hike is not exactly what the voters want to hear. Continuous rises in the incomes of higher-income groups and businesses might further increase the affordability gap across groups. However, a rise in minimum wages is expected to ensure that the lower-income groups do not suffer amidst rising consumer prices.
DO NOT MISS: Political unrest in Sri Lanka amid rising economic turmoil
