Analysis of Wage Stagnation in Australia: Impact and Logicality of Fair Work Act

Assessment task 1: Analysis of Contemporary
Issue
Analysis of Contemporary Issue
Name of the Student:
Name of the University:
Author Note:
Page 1 of 16
Albin Pallikkunnel
Student ID: 206318

Assessment task 1: Analysis of Contemporary
Issue
Executive Summary:
The paper attempts to explore all the aspects of the effect that wage
stagnation has imposed on the country of Australia. It also highlights the
logicality behind the implementation of such a concept as a source for
rectification of a bigger issue like declining in the rate of inflation of the
country. The paper provides all sides of argument of the wage stagnation
and finally concludes that the method that Fair Work Act has applied to
stable the economy is not appropriate at its fullest terms although
beneficial for certain individuals.
Page 2 of 16
Albin Pallikkunnel
Student ID: 206318

Assessment task 1: Analysis of Contemporary
Issue
Table of Contents
Introduction:................................................................................................4
Wage stagnation is the logical outcome of the Fair Work Act:....................5
Wage Stagnation Analysis:.......................................................................5
Elements to Agree:...................................................................................6
Elements to Disagree:..............................................................................8
Importance of the Question:....................................................................9
Conclusion:................................................................................................11
Reference..................................................................................................12
Page 3 of 16
Albin Pallikkunnel
Student ID: 206318

Assessment task 1: Analysis of Contemporary
Issue
Introduction:
Wage stagnation is the situation which results when the total output
is declining and impacting the wages of the workers being flat or no
increase (Wisman 2012). This is one of the major economic issues which
are impacting the human resource development as well as the industry
productivity. There are various companies which are following the Fair
Work Act in order to deal with inequality among the workers. The basic
principles of Fair work system include protection from unfair dismissal,
and national minimum wage (Australian Government, 2019). Australia is
facing the slowest growth in this decade. Wage stagnation is one of the
major issues which have become the hurdle in the growth of workers as
the wages have not grown from the last six years.
The causes for the wage stagnation can be the shift in employees
by collective agreements (Long, 2019). In Australia, most of the workers
were unionized but now the percentage has drastically reduced It is seen
that around 10% of private sectors and public sectors are unionized. This
leads to the manager to become stronger on workers as wages are not
able to be negotiated in a collective manner. Recently the wage
stagnation issue can be suggested to be solved through collective
measures which include living wage plan which is focused to balance
business concerns (Machin 2016). This provision is in the process and the
newly elected government of Australia has proposed to change the Fair
work Act into fair work system which will take consideration of the views
of all business communities, employees, and unions (Remeikis, 2019).
Page 4 of 16
Albin Pallikkunnel
Student ID: 206318