Basic wage 'must keep pace with inflation'

THE minimum wage must keep pace with inflation and the rental property market, the head of the Northern Rivers Affordable Housing Project said yesterday.

Trish Evans was responding to comments by the Federal Government's Fair Pay Commissioner, Ian Harper, who said any increase to the basic wage this year needed to be tempered with job protection as the economy slowed.

“If we put the minimum wage up too high that can induce employers to sack people,” Prof Harper was reported as saying.

“If we don't put up the minimum wage fast enough, people leave the workforce and go on the unemployment rolls.”

Ms Evans said she understood Prof Harper's dilemma, but questioned the point of having a job if it didn't pay for basics such as housing.

“Wages already aren't keeping up with rental housing costs increases,” Ms Evans said. “To not acknowledge this is only going to put people in more housing stress.”

Prof Harper's comments come before this week's release of the December jobless figures, which are expected to show employment has stalled.

Last month unemployment grew to its highest level since February 2007, with the workforce shrinking by 15,600 jobs.

Slightly fewer than 500,000 Australians are now searching for work.

Southern Cross University adjunct economics professor Lawson Savery said there was virtue in Prof Harper's reluctance to repeat the last two years of large wage rises for low-paid workers.

Last July, the Fair Pay Commission surprised many by granting a $21.66-a-week rise in the minimum wage for the country's 1.3 million low-paid workers, increasing the base rate to $543.78 a week.

This followed a $26 rise the previous year.

“Prof Harper has a point,” Prof Slavery said. “I'm much more concerned about keeping people in jobs.

“One of the great problems facing the economy is that we may give pay rises, but because of the lack of sales we may be putting people out of work.”

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