With some understatement, president Justice Iain Ross says the commission “will be operating at perhaps a higher level of uncertainty than in the past”. Although unemployment is expected to hit more than 8 per cent today with the loss of half a million jobs, the unions still want to push ahead with their claim for a 4 per cent wage increase, not just to the wage floor but all the way up the award pay scales to over $100,000. The ACTU says a wage rise will add to spending and help to pump-prime the recovery. But basic economics says that you don’t increase demand for labour by increasing its price. The ACTU itself agreed during the 1982-83 recession that real wage cuts would help restore corporate profits and generate job growth – which they did. But then, modern Labor might call that trickle-down economics. Four decades later, the laws of economics have not changed, even amid the COVID-19 pandemic. Global trade has been disrupted, but not enough to make Australia a closed economy. Higher wage costs would especially hit the thousands of small-business employers and their employees that the Morrison government has allocated $130 billion to help on JobKeeper life support.
To avoid the complex guesswork in a Team Australia spirit, the commission should defer a decision on the wage case until the economic picture is clearer. If legally essential, the government should ask Parliament to pass a simple bill to permit the commission to delay a decision given the extraordinary circumstances. If Parliament can agree to spend $130 billion on JobKeeper, it can surely change a few words of statute to stop more workers from being priced out of a job.