Saturday, November 03, 2007

Howard legacy: wages fall

Real wages have fallen under the Howard Government's new wage setting system, with some workers on award pay rates now more than $15 a week worse off in the past 12 months.

Recent higher inflation has overtaken the modest pay rises handed out by the Australian Fair Pay Commission last month, pushing most of the 1 million workers covered by award rates into the red, according to new figures.

The commission confirmed the figures yesterday, saying it had relied on Reserve Bank inflation forecasts, which were too low.

"The … inflation forecast was 1.6 per cent for the period December 2006 to October 2007. We now know the actual outcome for the period was a rate of CPI inflation of 2 per cent," commissioner Ian Harper told The Age.

"Had the RBA forecast been correct, the commission's decision would translate to a real wage increase for the majority of pay-scale-reliant Australians."

The figures, compiled by the ACTU, show the 100,000 people earning the federal minimum wage of $522.12 a week have all but trodden water, with a tiny, six-cents-a-week real increase in their wage.

But at all other classification levels, which cover 1.1 million workers in many industries, pay rates have fallen behind inflation.

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