Australian Council of Trade Unions chief Sally McManus has backed NSW teachers’ push for a pay rise of up to 7.5 per cent among a string of major wage campaigns, saying it was the union movement’s job in 2022 to overhaul employers’ expectations of what workers should be paid.

McManus’ stance, which also endorses bank workers’ campaign for a 6 per cent rise, and 5.8 per cent for those in manufacturing, follows a week of industrial turmoil in which Sydney train services were severely disrupted, and tens of thousands of teachers took to the streets to strike over pay.

ACTU secretary Sally McManus says it’s the job of the union movement to change employers’ expectations of what workers should be paid.Credit:Alex Ellinghausen

“You shouldn’t underestimate the degree to which you elevate people, you say how important they are and how essential they are, and then you treat them with no respect afterwards. It’s not surprising that this is happening in those frontline areas,” McManus said.

“I think that employers have got used to – for quite a long time – wage suppression, and they’ve got to recognise there needs to be changes.”

She said a combination of soaring living costs and wage stagnation would encourage more workers to sign up for enterprise bargaining, a day after the latest quarterly figures showed negotiated pay increases were at 2.6 per cent, unchanged from the same quarter in 2021.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said enterprise bargaining was not “playing its part”.

NSW teachers marched in protest over poor pay and conditions this week.Credit:Brook Mitchell

“Enterprise agreements should be fundamental to our industrial relations system, driving pay increases, improving job security, and boosting productivity. However, enterprise bargaining has crashed over the past decade,” he said.

In an interview with The Sydney Morning Herald and The Age, McManus said she “of course” backed the pay increases pushed by various major unions, and, when asked whether it was the job of the union movement in 2022 to readjust employers’ expectations of workers’ pay, responded:“I agree.”

But McKellar warned linking broad-based wage increases to spiralling inflation would “strangle the economy”.

“It’s time for everyone to cool it until the economic future is clearer,” he said.

Up to 2.8 million Australians will receive a pay rise from Friday after the Fair Work Commission increased the national minimum wage by 5.2 per cent and pay for people on higher industry awards by 4.6 per cent, which the business community has warned could lead to a wage-inflation spiral.

Former ACTU head Bill Kelty, the unionist key to the historic Hawke-Keating accord, said a nation of workers continuously chasing higher pay to outrun inflation was no good for the economy.

But he dismissed much of the talk of a looming wage-inflation spiral as “hyperbole”, saying current economic conditions bear no resemblance to those of the 1970s and early ’80s, when pay increases were linked to the consumer price index.

“I was in an environment of chasing higher wages, and it was no good for anybody,” Kelty said this week amid the debate about whether the economy can withstand workers’ push for higher pay during the cost-of-living crisis. “You’re chasing your tail with higher and higher inflation.”

Former ACTU secretary Bill Kelty says average wage rises of 3.5 to 4 per cent are more likely than an increase in line with expected inflation of 7 per cent.Credit:Justin McManus

He said inflation today was essentially being driven by global factors such as energy supply shortages, supply-chain issues and the war in Ukraine and was “not the same” as in the 1970s and ’80s.

“If you get 5 to 7 per cent inflation, will it necessarily lead to a 7 per cent wage adjustment? The answer is no,” he said, adding average wage rises of 3.5 to 4 per cent were more likely.

Kelty agreed there has been wage suppression, and several essential occupations, including teachers and aged care workers were “being paid too little”.

McManus said the cost-of-living crisis and inflation spike were “obviously” not sustainable in the long term, “just as low wage growth is not sustainable”.

“We need to bring down inflation and get wage growth moving for the first time in a decade,” McManus said.

NSW government ministers clashed with their respective workforces this week when Education Minister Sarah Mitchell said it was “disappointing” after Catholic and public school teachers walked off the job over better pay and conditions, with the latter calling for a rise of between 5 and 7.5 per cent.

Transport Minister David Elliott accused the Rail Tram and Bus Union of politically motivated industrial action with which the public wouldn’t side after services were cancelled this week over safety.

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