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

Vol: 
01/2013
Author name: 
J. Rob Bray
Year: 
2013
Month: 
October
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.

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