Australia has one of the world’s highest pay floors and relatively low unemployment, offering a case study in the modern economic theory that raising wages doesn’t kill jobs.


The Biden administration has cast its campaign to raise wages as a way to lift up millions of the working poor, reduce inequality and boost the economy.


In Sydney, the going rate for babysitters and tutors is the equivalent of $22 an hour — well above the national minimum wage of about $15. Yet the economy hasn’t come crashing down. Until the pandemic, Australia was enjoying an almost three-decade growth streak.


The minimum wage is reviewed annually in Australia by an independent commission The decision influences wider wage growth; economists estimate that the pay of about one-third of workers, including some professionals, is tied to changes in the minimum wage.

The minimum wage can be both the floor and the ceiling but it prevents exploitation in many industries, particularly in agriculture and hospitality. The argument every year when the wage is reviewed is that to raise it means job losses but in a buoyant economy it just means transfer of labour.

It can also put a ceiling on youth employment in places such as the fast food industry who are allowed to pay lower rates to the youth but then the young should be upwardly mobile and not stuck in dead end jobs

Less than 2% of the Aussies fall in the minimum wage criteria . Like the US ,the vast majority have pay above the minimum wage . It is set not for low wage workers . What is does is set the floor for all other wage negotiations .

Assuming the laws of economics are the same in Aussie as here then the net effect is that raising the cost of hiring low skilled labor means lower demand of their services .

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Originally Posted by tomder55

Assuming the laws of economics are the same in Aussie as here then the net effect is that raising the cost of hiring low skilled labor means lower demand of their services .

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The net affect is that the pay of about one-third of workers, including some professionals, is tied to changes in the minimum wage and influences wider wage growth.

Australia has one of the world’s highest pay floors and relatively low unemployment, offering a case study in the modern economic theory that raising wages doesn’t kill jobs.

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The net affect is that the pay of about one-third of workers, including some professionals, is tied to changes in the minimum wage and influences wider wage growth.

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The net effect is that it does not help low skilled workers . Employers are more likely to accelerate the transition to automation and other efficiencies .
Evidence minimum wage hikes result in workers being replaced by robots (cnbc.com)

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Originally Posted by tomder55

The net effect is that it does not help low skilled workers .

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Minimum wage in Australia is US$15/hour (equivalent). That helps low skilled workers.

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Originally Posted by tomder55

Less than 2% of the Aussies fall in the minimum wage criteria . Like the US ,the vast majority have pay above the minimum wage . It is set not for low wage workers . What is does is set the floor for all other wage negotiations .

Assuming the laws of economics are the same in Aussie as here then the net effect is that raising the cost of hiring low skilled labor means lower demand of their services .

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In an economy where education is mandatory and students are given incentives to move on to tertiary study, the only people who work in low paid jobs are dropouts and migrants. The laws of economics work a little differently here because of government intervention. It is true automation has affected low paid jobs more than a minimum wage but there are still factories that pay minimum, exploiting the worker, so, as they have no social responsibility, just profit motive, there must be intervention.

Uhm...as has already been pointed out in another post, American average wages are a good bit higher than in Australia. Just sayin.

"Fewer Americans today make the federal minimum wage or less. In 1980, when the federal minimum wage was $3.10 ($9.86 in 2019 dollars), 13% of hourly workers earned the federal minimum wage or less. Today, only 1.9% of hourly workers do. The number of federal minimum wage workers has decreased from 7.7 million in 1980 to 1.6 million in 2019.

Let's hear it for capitalism and free enterprise!!

https://usafacts.org/articles/minimu...ning-725-hour/

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Originally Posted by paraclete

It is true automation has affected low paid jobs more than a minimum wage but there are still factories that pay minimum, exploiting the worker, so, as they have no social responsibility, just profit motive, there must be intervention.

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Economic efficiencies, including automation, have always affected low-paying jobs (and jobs in general), but government has an obligation to protect the low-paid workers from the factories that exploit the workers.

I agree, but there are those here who applaud the right to exploit

If by, "applaud the right to exploit," you mean I don't think the government should price teens and low-skill, entry level workers out of being able to work, then I plead guilty.

No I mean factory owners, large agricultural enterprises, almost any enterprise in regional areas and any ununionised enterprise

Don't know about Australia, but here you would be hard pressed to find a factory which pays minimum wage. I would imagine you would not find a farm or ranch paying minimum wage. That is largely the purview of fast food outfits, but even in those cases, they don't pay minimum wage for the most part. Since the Trump economy, it is simply too easy to find at least ten or twelve dollars an hour. Relatively few full-time adult workers work at minimum wage.

Yes well you see things are different here, despite a buoyant economy, there is much part time work paying minimum wage. Of course the big industries don't pay minimum, and the general complaint is that wages have stagnated and covid hasn't helped with many people finding they must accept anything to stay afloat