Frontline workers to slash spending if wage freeze proceeds

As public sector unions prepare to fight the state government’s proposed wage freeze in the NSW Industrial Relations Commission, new data shows nurses and midwives are grappling with a bleak outlook.

According to a YouGov* survey of nurses and midwives, a staggering 83 per cent of respondents said they were already stressed by day to day expenses and over three quarters (77 per cent) felt underpaid.

If hit with a wage freeze, results show nurses and midwives would curb monthly expenses by an average of $350, highlighting the broader economic impact on NSW communities. Meanwhile, 80 per cent of respondents indicated spending would drop significantly on eating out, gym membership and shopping.  

Alarmingly, over half (56 per cent) of respondents indicated their household had already suffered employment impacts due to the COVID-19 pandemic.

NSW Nurses and Midwives’ Association (NSWNMA) General Secretary, Brett Holmes, said the evidence was clear that a wage freeze is fundamentally bad public policy and would lead to stagnant growth across the NSW economy, rather than assist its recovery.

“This data reinforces what economists have been saying about a wage freeze. People will slash their spending, because the impact of a real wage cut indicates far worse times are ahead,” said Mr Holmes.

“There’s a flurry of people getting back out into the community and hitting the shops right now, but if this wage freeze goes ahead, and if private sector employers follow the government to also impose wage cuts, then we will see a dramatic shift.

“This is the opposite of what we need to get the NSW economy going again and the opposite of how we should be supporting sectors, like retail and hospitality, to get back on their feet again.

“The government says it’s focused on our post-pandemic recovery. It should invest in public sector workers’ wages and give them the confidence to spend in local shops and support businesses.”

The YouGov survey also shows a wage freeze would devastate nurses and midwives’ plans for beyond the bedside, with almost half who currently make voluntary super contributions forced to cut back.

“Representing a female dominated industry, we already hold concerns about our members’ super entitlements. Now 93 per cent tell us they are worried about having enough money for a comfortable retirement,” Mr Holmes said.

“We again call on the Premier and Treasurer to abandon their public sector wage freeze and honour the 2.5 per cent pay increase.”

New analysis by the Australia Institute’s Centre for Future Work also confirmed reduced consumer spending from a wage freeze would impact the same sectors already struggling from the pandemic.

Economist Dr Jim Stanford said this would impose a double burden on the small businesses that dominate the retail, hospitality and tourism sectors.

“The industries that have already been most damaged by the pandemic, would now suffer a double blow from this needless and self-defeating action,” said Dr Stanford in his analysis.

“[The state government] should indicate to the broader economic and business community its conviction that wage increases will help the economic recovery, not hurt it – and lead by example, by compensating its own employees for the invaluable job they have done.”

The NSWNMA will appear in the NSW Industrial Relations Commission today and tomorrow on behalf of members, arguing for nurses and midwives to receive their 2.5% pay increase from 1 July.

*The report conducted by research company YouGov reached 2,700 NSWNMA public sector members, from Friday 12 June to Wednesday 17 June 2020.

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