The historical tension between capital and labour is largely over, bar the occasional rhetorical skirmish, because labour now owns so much capital through retirement savings.
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To borrow from the advertising by Australia's industry-based funds, consistently the best performers in the superannuation business, we really are all in this together.
Australia has a third of 1 per cent of the world's population but is the world's 13th-biggest economy overall and the 10th-richest per head.
As a result of the retirement savings system introduced 25 years ago in an enlightened collaboration between business, unions and government, we have the fourth biggest pool of superannuation.
Yet, because of stagnant wages and the surging cost of energy, healthcare and housing, inequality in income and wealth has been growing. A little over a decade ago, the richest 20 per cent held 58.6 per cent of wealth, while the poorest fifth had 1.4 per cent. In recent years the corresponding figures have been above 60 per cent and down to 1 per cent.
Low wages growth is not just making life difficult for the poorest (to the point where three million are below the poverty line) but shackles the whole economy because people have insufficient cash and confidence.
This is the context in which the ACTU is advocating Australia emulate Britain in adopting a minimum living wage set at 60 per cent of median income. It would mean a rise of $80 a week in the minimum wage of $695, phased in over two years.
The greatest form of social justice is a job, and the greatest source of employment is private businesses. So, an unduly large increase in the wage would be counter-productive. Equally, as the Reserve Bank and many private sector economists hold, the lack of growth in wages dampens spending, profits and employment.
The question is whether the proposed wage is too large, not whether there should be a rise. That will be determined by public debate. Lifting the spending power of the poorest is an effective way to stimulate the economy to benefit all, because people on lower incomes spend virtually all the increase.
That has a self-sustaining multiplier effect on sales, profits and jobs. Increases at the top levels tend to be invested, particularly in tax breaks on property and financial assets, rather than spent.
