The Albanese government claims it is looking after low income Australians by urging the Fair Work Commission to deliver an above-inflation minimum wage rise for around 2.7 million award workers. This is classic stage one thinking: it highlights the visible pay increase while hiding the real consequences.
Most importantly, don't look at the intentions of the claimed policy, look at the outcomes it delivers.
A minimum wage is a government price floor on labour. When set above what some workers' productivity is worth to employers, those workers become too expensive to hire. Employers respond by cutting hours, extending overtime for existing employees, freezing hiring, automating, or simply not expanding, especially in labour-intensive sectors like retail, hospitality, and aged care.
History shows that the people priced out first are the least skilled, youngest, and most inexperienced, the very low income groups the policy pretends to protect.
The real minimum wage for them becomes zero, no job at all. Historical patterns confirm this: minimum wage hikes disproportionately raise unemployment among entry level workers, blocking the first rung of the job ladder and trapping more people in long term joblessness.
While the RBA openly says higher unemployment is needed to fight inflation, the government markets the wage rise as compassion. In reality, it delivers the extra unemployment the RBA wants, but concentrated on the vulnerable. This is not looking after people. It is lying to them by sounding sanctimonious with good intentions, all while knowing they produce worse outcomes.
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