Inflation makes wages unreal

The Australian Fair Pay Commission has put a hold on wage rises as inflation increases. Head of the commission, Ian Harper, said he saw the Reserve Bank’s interest hike as the economic factor most likely to keep award wages low.

Jeff Lawrence, secretary for the Australian Council of Trade Unions (ACTU) argued that the lowest paid workers deserved a real wage increase to offset inflation. He added that the Reserve Bank had found no evidence that low-paid workers were contributing to inflation.
 
"On the contrary, award workers suffered a decline in the real value of their wages in last year's Fair Pay Commission decision," he said. Considering hefty company profits, pushing a 30 percent increase in executive salaries, Lawrence pointed out it was “unfair for the lowest paid to bear the brunt of belt tightening”.
 
Workplace Relations Minister Julia Gillard has assured the Howard government-appointed commission that the tribunal would continue to operate under the legal framework it was given, taking into account macro-economic factors, particularly labour and employment competitiveness. The commission will be replaced by Fair Work Australia in 2010.