Labor pushes to change minimum wage to a 'living wage'

Australia’s Labor Party is promising to change the current minimum wage to a more suitable “living wage” if it wins the next election.

Brendan O’Connor, shadow employment minister, is leading reform efforts with a two-step strategy that focuses on low wage growth, an issue that Labor hopes to zero in on once it faces off with the government in the upcoming elections, The Guardian reported.

“Labor will legislate so that the commission’s highest priority will be making sure no person working full-time in Australia need live in poverty,” O’Connor said.

“A living wage should make sure people earn enough to make ends meet, and be informed by what it costs to live in Australia today, to pay for housing, for food, for utilities, to pay for a basic phone and data plan.”

If elected, Labor plans to have the Fair Work Act amended, prompting the Fair Work Commission (FWC), the government agency responsible for setting the minimum wage in the country, to determine the appropriate living wage.

The FWC would have to consult all stakeholders, such as business and union leaders, and examine factors, such as the ability of workers to pay taxes, family and social benefits, and living costs.

The current minimum wage objectives were determined before modern-day household expenses, such smartphone and internet bills, were factored into living costs.

Once a living wage has been set, the FWC would have to calculate how long it would take for the living wage to be implemented across the country; factor in the capacity of business owners to pay workers; and determine how the new wage standard would affect employment, inflation, and the economy as a whole.