Should Age Pensions rise with wages?

The Australian Council of Trade Unions (ACTU) wants to scrap minimum wage in favour of a living wage set at 60 per cent of the median wage.

The push comes after the Australian Bureau of Statistics (ABS) released figures last week showing the cost of living is rapidly rising and wages aren’t keeping up – driving millions of workers and families into poverty.

Electricity costs have risen 539 per cent faster than the Consumer Price Index (CPI), gas by 356 per cent, utilities by 394 per cent and health costs, housing and transport costs are also rising sharply.

“The figures from the ABS show that rather than getting better, everything is getting more expensive and wages aren’t keeping up. The Government is failing working people,” said ACTU president Sally McManus.

If the move is successful, the lowest paid workers would receive a weekly wage of $738 – an $80 increase on the current minimum wage. This is based on a median wage of $1230.

The Living up to the Promise of Harvester: Time for a Living Wage report was released yesterday – on the 110-year anniversary of the Harvester judgement which originally declared that “all Australians deserve to be paid a wage that they can afford to survive on”.

In conjunction with the report, the ACTU launched a Change the Rule for Workers campaign to create a living wage for Australians.

The ACTU claims that the original promise of the Harvester Judgement has been completely eroded by decades of neo-liberal policies.

“Corporate profits rose 40 per cent last year, and full-time workers can’t afford to feed and clothe a family. The system is broken,” said Ms McManus.

“When millions of working people have fallen into poverty, Australia needs a pay rise.”

According to the report: “A living wage must be sufficient to ensure that all working people are able to afford rent in a suitable dwelling, a healthy diet, a good quality education, healthcare, transport, electricity and other energy costs, adequate clothing, entertainment and a contingency for unexpected expenses.”

This is all well and good for workers, but what about older people? The 2015 Global AgeWatch Index shows that Australia has a poverty rate of 33 per cent for those over the age of 60. Another report conducted by Per Capita, The Benevolent Society and The Longevity Innovation Hub reveals that around 500,000 older Australians live below the poverty line. So, surely there needs to be similar consideration given to our pensioners.

Currently, the Age Pension is $880.30 per fortnight for singles and $669.60 each for couples. By comparison, the ACTU living wage proposal would mean workers receive $1476 per fortnight, which would be $595 more than what age pensioners receive.

If the Fair Work Commission has openly admitted that the current base wage of $658 per week is inadequate to keep some workers out of poverty, then how are older people, many of whom rent and have much higher health costs, supposed to get by on $440.15 per week?

The typical attitude seems to be that once they’re old they disappear. But, no, older people also pay the outlandish electricity, gas, utilities, rent, transport and health costs faced by working Australians. And, yes, many of them are still renting and deal with the despicable housing affordability crisis faced by everyone else.

Only they don’t have a weekly wage that’s over $200 per week higher than the pension.

Ms McManus said: “The promise of Harvester was financial security for working people, not barely keeping from starving and making endless sacrifices to keep the lights on.”

“No one should live in poverty in Australia.”

Age pensioners and older people don’t deserve to live in poverty either.

Do you think that, if this living wage were introduced, that the Age Pension should be raised too? Are you struggling to keep up with the rising cost of, well, everything? What action can be taken to give age pensioners a better standard of life?

Related articles:
The real shame of poverty figures
Asset rich but living in poverty
Why do women retire in poverty?

Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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