Australian businesses criticised for opposing workers' wage hike
Australian business groups are facing scrutiny from the public for opposing moves to increase workers' pay while also staying silent on calls to impose a similar limitation to executives' salaries.
The Australian Chamber of Commerce and Industry (ACCI) is the largest and most representative business association in the country. The group is made up of chambers of commerce at the state and territory levels, as well as national industry associations.
However, when the federal government announced its support for wage increases for workers, the ACCI was reportedly one of the groups that shot down the idea, telling the Fair Work Commission (FWC) to limit any potential increases to workers’ minimum pay to just 2%.
In an article by The Guardian, the ACCI was asked whether it would implement the same wage restriction for its own CEO as for workers. But while the group was vocal in opposition to a pay increase for workers, it remains relatively quiet on the matter regarding executives.
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Minimum wage increase
While the ACCI and other similar organisations do not regularly publish a detailed report on their CEO pay, there have been occasions where the information was shared with the public.
However, in this particular instance, the ACCI refused to say anything about just how much its CEO, Andrew McKellar, is making or if there were any plans to increase his salary.
“ACCI won’t be responding,” an ACCI spokesperson said.
It is interesting to note that McKellar is one of the leading business leaders who is pushing for restraint on any minimum wage increases.
For the ACCI chief, economic and business conditions in the country are not stable enough, and that any minimum pay increase that is not aligned with the productivity gains of companies would only result in higher and long-lasting inflation.
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McKellar pointed out that the wage increases that occurred over the past two years were already “exceptional”.
It seems that McKellar is not the only one within the ACCI who has this opinion. None of the association’s affiliates, whether in the state or territory levels, was willing to answer The Guardian’s question about the CEO’s pay increase.
The Housing Industry Association (HIA) was one of the groups that refused to respond to The Guardian’s questions. However, in its own submission to the FWC, the HIA said there should be a conservative approach in this year’s minimum wage review.
Another group that refused to give an answer to the questions was the Restaurant and Catering Association (R&CA). The group, however, told the FWC that any wage increase should be “no more than 2%”.
The Australian Retailers Association (ARA) offered a slightly different take on the matter. The group called for any increase to workers’ minimum wage to be set at 3.1% from 1 July.
As an example, the ARA described its own standard remuneration review where all employees, including the CEO, are assessed for potential pay increases based on consumer price inflation, key performance objectives, and a market benchmark.
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Challenge of closing the pay gap
Despite recent increases in pay, the gap between the salaries of company executives and employees continues to grow. The average remuneration of top executives, for instance, jumped from 17 times the average earnings during the 1990s to 42 times in 2009, according to the Productivity Commission.
Meanwhile, the differential between CEO and regular worker’s pay is tracking at about 55 times, according to the Australian Council of Superannuation Investors. Much of the pay difference comes from the bonuses that executives often receive as part of their pay packets.