Why are hundreds of thousands of Australian children struggling in poverty, even with a parent working full-time?

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Brian Lawrence.

Australia has made little progress in recent decades to alleviate childhood poverty, according to Brian Lawrence, speaking on 17 October at an Anti-Poverty Week event, sponsored by Catholic Social Services Victoria. He said wages for many people were too low to lift children out of poverty.

Mr Lawrence has drafted submissions and appeared at national annual wage reviews since 2003 on behalf of the Australian Catholic Council of Employment Relations (ACCER), an agency of the Catholic bishops.

Lawrence quoted the Fair Work Commission (FWC) decision of June 2017 that Australia had ‘a legacy of relatively high inequality in earnings and in household disposable income, and disturbing levels of poverty especially among families with children’ (par. 68).

In its March 2018 submission, ACCER pointed out that the FWC for two decades or so failed to adjust minimum wage rates to reflect rising community-wide incomes.  In regard to National Minimum Wage (NMW), the loss of relativity to median wages over two decades has cost NMW-dependent workers more than $50 a week.

The FWC knew that the government’s strategy was to reduce financial support for families, not to increase it, resulting in a stand-off between the government and FWC despite its statutory obligations to set fair safety net wages.

ACCER argued for an increase in the minimum wage by $32 a week for classifications  up to the C10 wage rate (for trade-qualified workers, then $809.10 per week), which would provide relatively more for the low paid than would the claim of 3.9 per cent for higher paid classifications. It sought a further increase in the NMW of $8.10 per week, to progressively move the NMW to the lowest minimum wage for cleaners,

Instead of granting significant wage increases for the lowest paid, the FWC in June 2018 awarded a uniform 3.5 per cent increase to all minimum wage rates, consistent with its decisions since 2011. The lowest rate for cleaners is now $768.10 per week, which is $48.90 per week more than the NMW of $719.20 per week.

Lawrence commented that maintaining ‘existing award relativities will always trump the interests of the low paid. When confronted by poverty in working families, the FWC effectively resorts to the view that the wages it sets need only be sufficient for the single person’.

Lawrence pointed to recent research by UnitingCare and the Australian Council of Social Service on the extent of child poverty, that one child six aged 0-14 years was living in poverty. All Australians shared responsibility for this. Lawrence said that the Catholic Church also, with about 220,000 employees, should be advocating much more vigorously about the extent of child poverty and exposing the reasons for it.

‘If the general public knew that the FWC was putting wage relativities ahead of support for the working poor, which means preferring higher paid employees over lower paid employees, there would be profound discontent and, I expect, a change. The Church’s social justice groups, for example, could take this up as a campaign. We haven’t done enough.’

Lawrence criticised the Australian Council of Trade Unions for its decision in 2018 to change its previous practice of claiming relatively more for the low paid.  It claimed a uniform percentage increase of 7.2 per cent.  This kind of claim would ensure that that the lowest paid would not get relatively more than the highest paid even though working families are living in or near poverty and do not have a decent standard of living.

He argued that the ACTU had not sought a living wage, which has to take into account the needs of families, and that it had passively accepted the single person criterion for wage setting. ‘The ACTU seems incapable of formulating a wages policy that addresses family living standards.’

Lawrence concluded his paper with a variation on its title: ‘When will the FWC take childhood poverty seriously?’  His answer is ‘most probably not before the ACTU takes child poverty in working families seriously and challenges the FWC’s policy to prioritise award relativities over the livelihoods of low paid workers and their families’.

Read the full text of Brian Lawrence’s address, How many children have to live in poverty before the Fair Work Commission takes decisive action to support working families?



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