Minimum Wages Case Each year the ACTU and unions claim a pay rise for Australian workers through a ‘Minimum Wages Case’ — which is now called the ‘Annual Wage Review’. There are about 1.4 million low-paid Australian workers on minimum award wages who rely on the Case to protect their living standards – that’s one in six workers. These workers include cleaners, retail and hospitality staff, child care workers, farm labourers, and some factory workers.  They include large numbers of women and part-time or casual workers employed in the private sector in lower-skilled jobs. The number of workers reliant on minimum award wages is falling as collective agreements become more widespread, but for many Australians the minimum wages case is their only chance of a pay rise each year. Since 2000, unions have been successful in achieving award workers $72 a week more than employers have offered in minimum wages cases. This is a significant achievement considering the challenge for unions in operating for most of this time under the former Howard Liberal Government’s unfair IR laws. It is also worth noting that unions vigorously pursue a pay rise in minimum wages cases for award workers despite the fact that most are not members of unions. The 2012 Annual Wage Review In 2012, unions are seeking a $26 a week increase to the National Minimum Wage and up to the benchmark tradesperson’s rate, and a 3.8% increase for other award workers. This would lift the award wage for the lowest paid workers to $615.30 – a 68c/hour increase from $15.50 an hour. This will go some way towards closing the gap between those on minimum wages and the rest of the workforce, which has grown over the past decade. The wage increases awarded in 2010 and 2011 have stopped minimum wage workers from falling further behind, but it is time to make up the ground that was lost under WorkChoices.   While the National Minimum Wage had more or less kept pace with overall wages growth in the early 2000s, low-paid workers have lost ground under Work Choices. Since mid-2005, overall wages have risen by 27.5%, while the NMW has gone up by 21.7%. The benchmark tradesperson’s award rate has risen by only 18.7% over the same period. If the National Minimum Wage had kept pace with overall wages growth since 2005, it would now be $617.50 per week. Instead it’s just $589.30 per week. The claim for a $26/3.8% pay rise will also maintain real living standards for award workers. The Analytical Living Cost Index rose by 3.3% in 2011, and 24.2% over the period 2005-2011. There have been larger increases in 2011 for necessities like fruit and vegetables, water, electricity, petrol, childcare and education. Over the decade to the end of 2011, total company profits grew by 117%, but total wages rose by just 34%. The profit share of national income is close to its pre-Global Financial Crisis record levels, while the wages share is near to a 40-year low. Real pay cuts for the low paid under WorkChoices The former Liberal Government’s WorkChoices laws changed the way minimum wages were set to make them lower. This meant that over the period of the former Liberal Government’s WorkChoices system, the wages of over 1.4 million Australians reliant on award wages went backwards in real terms. Average award wages dropped by around $30 a week and some award workers had their real wages cut by almost $100 a week. In a final blow for award workers, the WorkChoices pay commission decided in July 2009 to freeze minimum wages — so award workers did not get a pay rise that year. The pay freeze decision meant the average award worker had to wait almost two years until July 2010 for a pay rise, despite having to cope with increases in rents, health care and other basic living costs in the meantime. It is only now, after the 2011 case, that the real value of award wages has been restored to what they were in 2006. New Fair Work laws The new pay setting body established by the Labor Government - Fair Work Australia (FWA) – now conducts the Annual Wage Review under new, fairer industrial relations laws. Under the new laws, the Panel considers not only the economic criteria, like inflation and productivity, but also important issues like social inclusion, relative living standards and the needs of the low paid. Fair Work Australia’s 2011 review concluded that the overall outlook for the economy is positive and that labour productivity is growing, underlying inflation is acceptable, unemployment is on the decrease and labour force participation is high. The panel also agreed with the unions that while the natural disasters during summer had affected some sectors in the economy, most businesses expected to recover and that there were government schemes in place to support those who needed it. FWA found a ‘a significant increase is appropriate which will improve the real value of award wages and assist the living standards of the low paid’. The Commissioners took the view that such an increase would not threaten business viability, jobs growth or add to inflation. Minimum wages are based on skill There are a range of minimum award wages, depending on the skill involved in the job. Note that there are also different minimum wages for workers covered by awards in the State industrial relations systems. For award workers in the Federal system, the 16 level benchmark award classification structure and different minimum award wage levels are shown below. Federal award classification and minimum weekly wage (from 1 July 2011)  C14 $589.30   C13 $606.40  C12 $629.70   C11 $651.30   C10 $686.20   C9 $707.80   C8 $729.30   C7 $748.80   C6 $786.80   C5 $802.80   C4 $824.30   C3 $867.40   C2(a) $889.00   C2(b) $928.00  NB: These rates takes effect from 1 July 2011. What’s next Unions, employers and other parties have now lodged their submissions for the 2012 Annual Wage Review by Fair Work Australia. While unions are seeking a $26 a week increase in the minimum wage, employer proposals range from $0 to $14.90 a week. All of these would mean an effective cut in real wages for award workers. Some employers have even claimed that parts of the workforce should be “quarantined” from a pay rise. Fair Work Australia is expected to hand down its decision in July.