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Discusses the debate over whether lowering youth wages would materially help the young unemployed to find jobs. The author sets out some of the theoretical and factual background to the debate, and gives references to the few serious inquiries made in the last three or four years. (CT)

The importance of Australia's minimum wage has never been more significant for low-paid workers than during the concurrent crises of wage stagnation and the pandemic. But in this current regulatory paradigm will the minimum wage be able to continue its history of fulfiling its social, economic and industrial objectives? This article will examine this challenge by reviewing how Australia's minimum wage has been calculated by an independent industrial tribunal through assessing the needs of workers, the capacity of employers to pay, and the function of the minimum wage as a safety net. Maintenance of the high level of the minimum and whether any groups of workers are left behind are key issues for the future of minimum wage regulation. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to examine the effects of health on wages of Australian workers, with a focus on gender differences and the role of macroeconomic conditions in the effects. Design/methodology/approach: The first 15 waves of the Household, Income and Labour Dynamics in Australia survey are used to estimate a wage model that accounts for the endogeneity of health, unobserved heterogeneity and sample selection bias. Findings: The results show that, after accounting for the endogeneity of health, unobserved heterogeneity and sample selection bias, better health increases wages for Australian male workers, but not for female workers. The results also show that accounting for the endogeneity of health, unobserved heterogeneity and potential sample selection bias is important in estimating the effects of health on wages. In particular, a simple ordinary least squares estimator would underestimate the effect of health on wages for males, while overestimate it for females, and simply addressing the endogeneity of health using instrumental variables could overestimate the effect for both genders. It is also found that the effects of health on wages fall under depressed macroeconomic conditions, perhaps due to reduced job mobility and increased presentism during a recession. Originality/value: This study adds to the international literature on the effects of health on wages by providing empirical evidence from Australia. The model applied to estimate the effects takes advantage of a panel dataset to address the bias resulting potentially from all the sources of the endogeneity of health, unobserved heterogeneity and sample selection. The results indeed show that failing to address these issues would substantially bias the estimated effects of health on wages. [ABSTRACT FROM AUTHOR]

Australia was long recognized for its relatively compressed wage structure. From the 1940s to the 1970s this was associated with a comprehensive regime of 'award-based' minimum wages. Since the 1980s, this has been subjected to comprehensive 'modernization'. After three decades of reform and in the most supportive economic environment in the OECD, Australian wage inequality has deepened. Although multiple political-economic forces have been at play, the evolution of Australia's labour standards regime is an example of 'institutional plasticity' whereby the purpose and operations of wage-setting institutions not only evolves but can actually be inverted over time. [ABSTRACT FROM AUTHOR]

In 1896 the colony of Victoria introduced the world's first legal minimum wage that also extended to adult men. It was much discussed around the world by commentators who saw its significance in terms of its radical break with the past. Traditionally conceptualised as an outcome of a domestic anti-sweating movement that focused on the exploitation of women and children in the clothing industry, I suggest that the radical innovation of the minimum wage is best explained if we adopt a world-history approach that recognises the potency of anti-slavery discourse in the nineteenth century, the encounter of British and Chinese workers in the context of urban manufacturing in 1890s Melbourne, and the ways in which the minimum wage, later theorised as a living wage, made the humanity of workers central to modern definitions of labour. [ABSTRACT FROM AUTHOR]

The attainment of ‘fairness’ is widely regarded as a worthy goal of setting minimum wages, but opinions differ sharply over how to achieve it. This article examines how interpretations of fairness shaped the minimum wage decisions of the Australian Industrial Relations Commission between 1997 and 2005. It explores the Commission's approaches to three aspects of fairness in minimum wages: first, eligibility for increases; second, the form of increase; and third, the rate of increase over time. The Australian Industrial Relations Commission consistently gave minimum wage increases that were expressed in dollar values and applied to all federal awards. Its decisions delivered real wage increases for the lowest paid, but led to falls in real and relative wages for the majority of award-reliant workers. Fair Work Australia, the authority now responsible for setting minimum wages in the national system, appears apprehensive about parts of the Australian Industrial Relations Commission's legacy and has foreshadowed a different approach, particularly with respect to the form of adjustment. [ABSTRACT FROM PUBLISHER]

The strength of the relationship between low wages and household needs has become an important measure of the effectiveness of Australia’s employment safety net. This paper reviews the recent treatment of the needs issue in safety net wage cases of the Australian Industrial Relations Commission, and provides a statistical analysis of data from two nationwide household surveys. I develop a method of identifying low-wage earners in sectors with high award reliance, and use it to describe the characteristics of their households. The workers of interest are predominantly found in households near the middle of the income distribution, rather than at the bottom end, because they typically live with other, higher-paid workers. The minority living in single-income households are more likely to be below the median income and to experience financial stress. A safety net maintained partly on the basis of a ‘needs’ criterion should be especially focused on the circumstances and prospects of this single-income group. [ABSTRACT FROM PUBLISHER]

Two recurring themes in submissions by industry groups and the Coalition Government to Safety Net Cases administered by both the Australian Industrial Relations Commission and the Australian Fair Pay Commission, as well as in decisions by both Commissions, have been that (1) an improvement in the tax/transfer arrangements for the low paid is a partial substitute for minimum wage increases; and (2) the family circumstances of low wage recipients should influence the degree of minimum wage adjustment. In this paper it is argued that conflation of the wage and tax/transfer systems introduces major contradictions into the principles of minimum wage adjustment, and that reliance on the tax/transfer system leads to adverse economic and social consequences. A simple rule for minimum wage adjustment is advocated, with the minimum wage level also being periodically recalibrated to enable the ongoing social inclusion of its recipients. Finally, in the international literature, the macroeconomic consequences of modest minimum wage adjustment remain contested, but this debate becomes largely irrelevant if the Federal Government renews its commitment to full employment through a Job Guarantee. Then the minimum wage also becomes the nominal anchor of the wage and price system. [ABSTRACT FROM AUTHOR]

State wage-fixation tribunals developed quite particular patterns of basic wage fixation during the Depression. They declined to follow the Commonwealth Court's 10 per cent wage cut, thereby confining its effect to about half the workforce and creating distinctly different State and Commonwealth basic wage patterns in each capital city. Further, tribunals' uneven patterns of basic wage adjustment to deflation meant that in some states, the real State basic wage increased. Patterns of state institutional behaviour and state politics therefore help explain the stickiness of real average wage levels during the Depression. [ABSTRACT FROM AUTHOR]

The article focuses on the proposed national minimum wages by the Australian Fair Pay Commission. In pursuit of the proposed minimum wage, the Commission is collecting evidence and hearing submissions from parties on an appropriate minimum wage. However, union movement and social groups opposed the decision claiming that the procedures threaten the living standards of working Australians and undermine the concept of a fair wage.

In 2004 money wages continued to grow at a moderate rate within Reserve Bank limits. In May, the Australian Industrial Relations Commission raised the federal minimum wage by$19 as part of the safety net adjustment. The workplace reform agenda of the federal government continued to be largely frustrated by the Senate, but the Coalition victory in October and its Senate majority in mid-2005 led the pundits to predict more energetic workplace reform in the coming months. The Australian Council of Trade Unions pursued a number of test cases before the Commission, which challenged the desire of employers and the federal government for a flexible award system, rather than one constrained by externally imposed entitlements. [ABSTRACT FROM AUTHOR]

Junior rates involve a system of minimum wages, defined as a proportion of the adult minimum wage, with this proportion increasing with age until the junior worker is considered an adult at age 21. This system is perceived to be discriminatory, and it is this perception that has led to extensive debate as to the potential replacement of junior rates with an alternative system of minimum wage determination. The debate with regard to junior rates is of particular interest from a labour economics perspective as it brings together two very topical areas of ongoing research, that pertaining to minimum wages, and that to the youth labour market.

The debate in Australia about youth wages and youth employment has been underway for a decade. It has generated much heat because no one in their right mind wants to do anything that would harm young people. Many critical aspects of the current situation need illumination, however, for a sensible reform path for youth wages to be found. On close inspection, the case for fundamental reform of youth minimum wage provisions is compelling. Virtually all nations have minimum wage laws. What distinguishes Australia is the system for setting minimum wages. Whereas other countries legislate minimum wage laws directly through parliament, in Australia these are set by independent industrial tribunals.

Studies the relationship between youth wages and employment using labor market data from Australia and the State of Queensland. Governments' use of policies to increase job offers to young workers; Australian government's introduction of a system of training wages; Increase of human capital of young workers.

The paper addresses the existence of an equilibrium unemployment-vacancies (UV) relationship in Australia. Cointegration test results suggest that no bivariate long-run (UV) relationship exists. Moreover, this finding fails to support the basic model of labour job search. However, a modified Beveridge Curve is proposed where it is found that a number of trivariate equilibrium relationships exist between unemployment, vacancies and one other variable; the replacement ratio, the proportion of long-term unemployed or the real wage. The existence of an equilibrium relationship in the multivariate framework is due to the endogenous modelling of the (un)employment flows which are assumed to be exogenous in the bivariate framework of the Beveridge Curve. [ABSTRACT FROM AUTHOR]