Australian Wages Under Pressure As Coca-Cola Amatil Strikes A Pay Freeze With Workers

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There is a conversation not being had with the Australian population and workforce which is fundamental to our social fabric, consumer confidence and economic growth.

That conversation relates to the ability, or more likely willingness in a globally competitive market, of Australian-based businesses to pay the level of wage rises that workers have become used to since the “Accord” was instituted back in the 1980s.

It is an important conversation because if – as increasingly appears most likely – wages growth is going to be below inflation in the years ahead, workers need to be informed so they can plan.

To not have the conversation is to leave workers – and as a result, consumers and confidence – with an elevated level of uncertainty. That is economic poison.

Already yesterday in the Westpac consumer confidence survey we saw a big shock not only in the headline fall in the index of 4.6% but also the huge crash in forward expectations of finances one and five years into the future.

It is an outlook that will not be helped by news in the AFR this morning that workers at Coca-Cola Amatil (CCA) warehouses will have their wages frozen and new employees will be paid 38% less than current rates.

The AFR reports that the “new pay deal this week with its Victorian warehouse workers that locks in a pay freeze in 2015, followed by a pay increase of about $30 in 2016” and that a CCA spokesman said “the deal brought wages closer to market rates”.

Stephen Smith, national workplace relations director at the Australian Industry group, told the AFR that this type of deal is being seen across Australia.

“We are seeing very modest wage outcomes across most sectors at present, given the economic circumstances, and wage freezes are certainly not uncommon.”

This is starting to feel like the new normal for Australian workers and it is likely to continue keeping consumer confidence under pressure and Australian workers, households and consumers cautious for a long time yet.

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