RR Phantom
Location : Wasted Space
Job/hobbies : Cayman Islands Actuary
 |  Subject: OZschwitz: Minimum wage means job-seekers wasting time  Sat Mar 24, 2012 5:24 am | |
| Of the many dumb ideas of the left, the minimum wage is one of the dumbest. In The End of Certainty, Paul Kelly identified compulsory wage arbitration as one of the five principles of the ''Australian Settlement'' after federation. We caught this virus early and, after 100 years of sandbagging by vested interests, it has been welded into our subconscious concept of ''Australian decency''.
The most dangerous ideas often have some merit. In the absence of an umpire, there is a risk of exploitation of workers in unequal bargaining relationships.
Your average North Shore matron with one string of pearls and a cashmere knit will support the idea of a minimum wage because of ghastly memories of women in the sweat shops having their babies on the factory floor.
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But the human costs of this idea massively outweigh the benefits. Because while it may benefit workers, the minimum wage is prejudicial to the poorest and most vulnerable members of our community - the unemployed.
Industrial relations is not just a contest between management and workers, but between job-seekers and those already admitted to membership. There are 100,000 Australians unemployed for more than a year. For them, the minimum wage acts as a raised drawbridge, separating them from their most fundamental aspiration. Every small increase is a higher jump for them to clear.
In international terms, the Australian labour market is like the high rollers room at the casino. You have to be able to make a starting bid of $15.50 an hour before you are allowed to join the tables. If you are a new arrival to this country, a refugee, with no English, low levels of education and few marketable skills, a courteous but firm doorman will advise you ''I'm sorry sir or madam, but you can't make the minimum bid. You will have to go back downstairs to the welfare room where someone will give you enough chips to survive but not enough to get in the game''.
Getting started is always the hard part. Like a first kiss, the first pay packet is a big deal. It comes with the revelation that ''somebody wants me''. There is a formative power in the knowledge that a person unrelated to me places a high enough value on my skills and labour to cut a cheque. That is a critical moment in the formation of what the Harvard professor Robert Putnam calls ''social capital''. Imagine if you got from one end of your life to the other, and never had that experience.
For a case study of the damage done, see Gough Whitlam's well-intentioned decision to legislate for indigenous wage parity after the Wave Hill walkout. The Cape York indigenous leader Noel Pearson has cited it as one of the most destructive of any government, forcing thousands of employed Aborigines off the stations and onto sit-down money. The ego destruction that followed their forced withdrawal from the dignity of paid work saw many self-medicate with grog and dope and some to beat wives or girlfriends, as report after tragic report has shown.
Trade unions represent workers in jobs, paying union dues - job-seekers are only going to put downward pressure on wages and conditions. The ACTU looks after those inside the lifeboat, grabbing the minimum wage as a club to smash the knuckles of those trying to clamber out of the water and over the gunwales.
The premise of the minimum wage is that Australians cannot be trusted to figure out how much to pay each other. So we have this intensely bureaucratic process when some wise soul hands down from on high the annual determination. Beforehand, affected parties are consulted and make submissions. This week we saw another outbreak of hostilities over how much it should be increased, as we entered the final days of consultation between the competing groups before Fair Work Australia hands down its decision on June 30.
Who do you think is most likely to get crushed in this to and fro out of the following list - the Australian Industry Group, the federal government, the state governments, the Australian Council of Trade Unions or the Farsi-speaking refugee who just stepped off the boat?
When the chairman of Fair Work Australia gets home from work and the kids say "what did you do today?", the truthful response will be "I did everything in my power to make sure that 100,000 Australians will never get a job."
Read more: http://www.smh.com.au/national/minimum-wage-means-jobseekers-wasting-time-20120323-1vp2m.html#ixzz1q1aTgt5w
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