Reflections on the Evolution of the Minimum Wage in Australia: Options for the Future

144 Pages Posted: 18 Oct 2013

See all articles by J. Rob Bray

J. Rob Bray

Government of the Commonwealth of Australia - Department of Family, Housing, Community Services and Indigenous Affairs (FaHCSIA)

Date Written: October 1, 2013

Abstract

The Australian Federal Minimum Wage has long historical roots going back to the 1907 Harvester Decision which established a ‘fair and reasonable’ wage to meet the needs of a working man and his family. In recent decades there have been significant changes in the role of the wage, many of which build upon earlier development. Effectively these have seen the minimum wage held constant in real terms with the role of support of the family being taken up by strong increases in government transfers for families with children and eclipse of the single breadwinner family. In essence this has transformed the minimum wage to a wage for a single person with the state taking on the support for children. This change has meant that there has been little pressure from the minimum wage on the labour market. This process is now coming to an end. In addition, in line with other research, it is clear that the minimum wage is a relatively ineffective ‘anti-poverty’ tool. The paper canvasses the options for future minimum wage policy including the use of EITC approaches.

Keywords: minimum wage, Australia

JEL Classification: J31, J38, N37

Suggested Citation

Bray, J. Rob, Reflections on the Evolution of the Minimum Wage in Australia: Options for the Future (October 1, 2013). Crawford School SPI Working Paper No. 01/2013. Available at SSRN: https://ssrn.com/abstract=2342026 or http://dx.doi.org/10.2139/ssrn.2342026

J. Rob Bray (Contact Author)

Government of the Commonwealth of Australia - Department of Family, Housing, Community Services and Indigenous Affairs (FaHCSIA)

Tuggeranong Office Park
Athllon Drive
Greenway, ACT 2905
Australia

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