Wage cuts will hurt the economy: unions

Unions say cutting workers' pay will damage the economy, after the government ordered the Productivity Commission to review the minimum wage.

ACTU president Ged Kearney says she is concerned the Abbott government's review of industrial relations will target penalty rates and cut workers' wages.

"Why is the government doing this? Wages growth is at the lowest it's been on record. Productivity is very high," she told reporters on Friday.

Ms Kearney said cutting take-home wages would hurt the economy and contribute to even more inequality in Australia.

She said paying penalty rates on nights and weekends compensated workers for a lesser quality of life.

"If you talk about cutting penalty rates, you are talking about cutting people's pay," she said.

Ms Kearney said the Productivity Commission had a history of focusing on economics rather than people.

"We're not talking about widgets and cabbages. We're talking about human beings," she said.