ACTU risks damaging small business and employment through excessive wage demands

12 Mar 2018 |

The ACTU risks damaging small business and employment through excessive wage demands, the Australian Chamber of Commerce and Industry (“Australian Chamber”) said today.

“The union’s pursuit of a $50 per week increase to the national minimum wage (which works out to be almost 7.2%) is an extraordinary claim that risks small business sustainability and jobs,” Australian Chamber CEO, James Pearson, said.

“The excessive union claim is well above inflation (which sits at 1.9%) and does not take into the circumstances of the small businesses which depend on the award wages system, including the minimum wage, to set rates of pay for their employees.”

The businesses impacted by the decision include small and medium businesses with high wages and salaries as a proportion of total expenses, and lower survival rates. They are already being squeezed by increased costs of doing business including higher energy costs.

Award reliant sectors such as retail are facing intense competition from the online, global market, Mr Pearson said.

“Small, award-reliant businesses that run on lean margins are often unable to pass on wage increases to consumers by increasing prices.

“If the union claim was awarded the short-term gains in the earnings of those who remain in employment would come at the long-term expense of those who lose jobs and hours.”

Australia already has the highest minimum wages in the world, as recognised by the World Economic Forum.

“The fact is that award wage increases, including minimum wage increases, can only be sustained where they are affordable and there is a productivity return for these businesses,” Mr Pearson said

“If small business can’t afford the increase, people start losing their jobs, entry level positions disappear and businesses slow or stop.”

Duncan Bremner

Director - Public Affairs and Advocacy

P  |  0448 822 666

E  |  [email protected]

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