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 Minimum wage rise not such a clear-cut win 

Minimum wage rise not such a clear-cut win

10/07/2008 8:29:00 AM
The Australian Fair Pay Commission's decision on Tuesday to deliver an increase of $21.66 a week to the country's lowest paid workers should provide at least some relief as people struggle to make ends meet.

Indeed, the commission, in making its decision, said it was clear from the submissions it had received, and from its own research, that households faced "significant pressures" as they struggled to pay for rising food, fuel and housing costs.

Today we learn that an increasing number of people are turning to the Salvation Army for help.

Whereas once the Salvos were called to help out the unemployed and the homeless, today they are helping workers and people with homes.

These people can no longer afford new clothes and furniture and are scouting the Salvo's second-hand shops for life's essentials.

The wage rise has posed some interesting scenarios.

Some economists believe that the extra cash will prove to be counterproductive; more consumer spending will only place added pressure on inflation and force another interest rate increase, they say.

Other people say that the $21 a week rise is not enough and will not bring about any relief to the working poor; that with the spiralling costs of food, fuel, and housing it will be soon gobbled up.

The Australian National Retailers Association has another spin on it.

It warns that increased wages could cause the job market to dry up; the association's chief executive Margy Osmond said that retail sales growth had already "flat-lined" this year and retailers had responded by trying to cut costs.

And cutting costs equates to not putting on more staff.

Of course, pay rises are good if you’ve got a job in the first place.

And the reality is that it will be organisations such as the Salvos that are left to pick up the pieces.

All in all, its a sign of the tough times ahead.

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