ACTU cites Trump’s war as spark for lifting low wage increase demands

Donald Trump and his war in Iran is sparking Australia’s peak union group to push for pay rises for minimum and low wage workers above the current rate of inflation.

The Australian Council of Trade Unions will ask the industrial umpire to grant three million award wage workers a 6 per cent pay rise, above the 5 per cent the union previously flagged.

“We’re doing this because the lowest paid workers in Australia must be shielded from Donald Trump’s war and the inflation that it’s causing,” union secretary Sally McManus said.

“This is very important that the Fair Work Commission responds to the situation that’s going on and shields Australia’s lowest paid workers from the inflation caused by Donald Trump’s war.”

Workers at major retail corporations, Deana and Debbie, flanked Ms McManus to speak to reporters on Thursday.

Deana said colleagues were cashing out their leave to pay bills.

“So after working all year, they’re not taking holidays. They’re cashing out their leave to just be able to pay everyday expenses, just to be able to survive. And that’s really sad. That’s heartbreaking,” she said.

Debbie said a lot of casual contract retail staff were not paying bills so they could buy groceries.

Inflation is now running at 4.6 per cent, but the ACTU is concerned that rate could eclipse pay increase rates, as it did coming out of the Covid pandemic.

While not revealing their employers, Ms McManus said both Deana and Debbie’s companies had room in their margins to pay a 6 per cent pay rise for workers on award wages.

“The Treasurer announced that the predictions are inflation will go up to 5 per cent,” Ms McManus said.

“In fact, it could go up higher. We must not be in a position where Australia’s lowest paid workers go backwards because of rising inflation. This pay rise is affordable.”

Treasury forecasts real wages will not start growing again until June 2027.

In this week’s federal budget, Treasury forecast scenarios where inflation could hit 7 per cent because of the oil crisis emanating from Iran.

“Because unfortunately, the truth is, none of us know the mind of Donald Trump and what might happen in terms of resolving the supply issues and with the war. So, you know, there could be a scenario where it’s much worse,” Ms McManus said.

Of the three million Australian workers on award wages, many work in supermarkets, aged care, child care, cleaning and hospitality. Factoring in inflation, these workers are almost 5 per cent worse off on their wages compared with March 2021.

The union calculates covering a 6 per cent pay rise to be the equivalent of half of Rio Tinto’s annual profit and less than the yearly profits of any of the big four banks.

“Businesses can always adjust their prices, whereas workers can’t, right?
Every year, they’ve got one shot to get their wages to catch up with inflation and this is the shot they’ve got,” Ms McManus said.

“It’s absolutely essential for three million hardworking Aussies and their families who absolutely depend on the minimum wage rises for them to keep up with their bills,” she said.

“They do not save any money. No one on those wage levels can save money.

“And that means they’ve got no choice other than to cut back on essentials … like food and going to the doctor because your rents, all your mortgages are locked in and your other bills are locked in and there’s nothing you can do about it.”

The union secretary argues a 6 per cent pay rise for three million workers would not lead to job cuts because the pay of this cohort represents only about 10 per cent of the national wage bill.

Each year the Fair Work Commission receives submission from unions and business groups and decides how much to increase the minimum wage and award wages.

Ms McManus says the business lobby needs to come up with a new argument because each year a pay rise for low wage workers proves not to be inflationary.

“Employers really need to go back to the drawing board with the arguments they make every single year because they are proven every single year to be wrong,” she said.

“In not one year has the minimum wage increase led to inflation.

“The small business lobby, unfortunately, are arguing that workers should have fairly vicious real wages cut, and that is extremely disappointing. We want your average small business owner to have empathy and support for their workers.”