Jun 282011
 

Judith Sloan, the very same Judith Sloan who appeared on last night’s QandA program…

Professor Judith Sloan, one of Australia’s best-known economists, is a leading figure in academic and business circles and has extensive experience in both the public and private sectors. She is currently an Honorary Professorial Fellow at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne. She is also a member of the Westfield board, a director of the Lowy Institute for International Policy and a regular contributor to The Australian newspaper. She has also been a university professor, a commissioner on the Productivity Commission, deputy chair of the Australian Broadcasting Corporation and Commissioner of the Australian Fair Pay Commission. Over the years she has sat on several boards, including Santos, Mayne Group, SGIO Insurance and Primelife.

…writes critically today of the recent Fair Work Australia decision to increase the minimum wage.

I find her argument disingenuous, from the perspective that she sets out to criticise the FWA decision, then makes direct comparisons between that decision outcome and non-related wage outcomes.

Considering only the national minimum wage — the lowest wage legally payable — Australia sits close to the top of the international pack. At about 54.4 per cent of full-time adult median earnings, Australia has one of the highest minimum wages in the world before any account is taken of other (higher) wages that are also regulated.

Fair Work Australia’s premise is the protection of the low-paid worker. Hence the name. Fair Work. Those who are unskilled and paid the basic wage. Not the median adult wage, but the basic wage. Watching Sloan on QandA last night showed me clearly how her thought processes work. She’s not precisely conservative in her thinking, but she’s not socially democratic either. She is an academic and academics will always attempt to over-complicate issues. Let’s be clear, Fair Work Australia is a Labor Party instrumentality. A bastardised re-working of its predecessor, the Fair Pay Commission, under the Howard Government WorkChoices regime. These bodies are not and never will be non-politicised entities. To criticise FWA for what it is flies in the face of praising the work of the Productivity Commission, which Sloan has done, in helping to establish FWA.

So, FWA approved a $22/week increase to the minimum legal wage payable to unskilled workers in this country. That decision was made based on the best information available at the time, including that from the Productivity Commission. All manner of consequences might well flow from that decision, but the sky falling as Sloan predicts isn’t likely to be one of them. In my view, the decision was a worthwhile win for the battler and one that goes some way toward off-setting the steadily increasing cost of living which is beyond the control of your average worker to off-set or in some cases, even cope with on a minimum wage. The decision was necessary. In a two-tier economy where the haves are happily ignoring the have-nots, such decisions are vital to slow the growth of the class divide between workers, and employers. The sky won’t fall, business will continue. All the doom-saying from academics like Sloan will never change that reality.