The release of the Productivity Commission’s issues papers into the workplace relations framework is set to reignite the industrial relations (IR) debate. And given the minimum wage looks to be in the commissions’ firing line, low paid workers should hope that along with productivity and competitiveness, terms that are often used when talking about IR, inequality is also given priority.
IR debates invariably affect lower paid workers more than those on higher wages. Low paid workers are more likely to be on the minimum wage and more dependent upon penalty rates – and these two issues are always in the firing line.
So it is worth noting that any cuts to the wages of lower paid workers will have a much bigger impact than it did in the past because there are more low paid workers now than in the past.
The OECD records that in 2002, just 13.8% of Australian workers were low paid (defined as earning less than two-thirds the median wage). This was well below the OECD average of 17.2%. But by 2012 while the OECD average had fallen to 16.3%, the percentage of low paid Australian workers had risen to 18.9% – the biggest rise in the OECD over that period:
And while business leaders suggest our high minimum wage hurts our competitiveness with other nations – because our labour costs are higher, the value of Australia’s minimum wage has fallen significantly in the past decade:
Is this a good thing? Those who argue a high minimum wage discourages employment because it costs too much to hire such workers would argue yes. But those who would point to that growing number of Australians earning “low pay” would worry that we are in danger of breeding an American like number of “working poor.”
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