The Quest for Fairness in Australian Minimum Wages

Abstract

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.

The Australian labour market in 2014: Still ill?

“…An important gender difference in Table 2 is that the female labour force participation rate has been stable or even increasing slightly, unlike the receding male participation rate. As noted previously and elsewhere (Gong, 2011; Healy, 2014), this may be partly an ‘added-worker effect’: females stepping up their participation in response to their male partners’ diminished prospects.…”

“…The Panel has also increasingly recognised the limitations of dollar-value minimum wage adjustments, which do little for award-reliant workers above the (2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014d, 2014e). National Minimum Wage (NMW) (Healy, 2011). Since 2011, the Panel has resumed the practice of making minimum wage increases in percentage terms, thereby helping to maintain the real values of the higher award rates as well as the NMW.…”

“…The Panel has been well informed about the extent of earnings inequality in the Australian workforce and its consequences for the relative living standards of award-reliant workers. The Panel has also increasingly recognised the limitations of dollar-value minimum wage adjustments, which do little for award-reliant workers above the National Minimum Wage (NMW) (Healy, 2011). Since 2011, the Panel has resumed the practice of making minimum wage increases in percentage terms, thereby helping to maintain the real values of the higher award rates as well as the NMW.…”

Subject to qualification: Weakening links between job roles and qualifications in Australian manufacturing enterprise agreements

“…In Australia, industry-based and occupation-based awards have historically contained classification schedules that set minimum pay rates for relatively skilled workers as well as unskilled workers (see Healy, 2011: 666). In many European countries, including Germany and France, industry-wide collective agreements fulfilled a similar function (Grimshaw et al., 2014); however, Australian awards are ultimately arbitrated by the state rather than the outcome of agreement between employers and unions.…”

Solidarity reconstructed: The impact of the Accord on relations within the Australian union movement

“…industrial solidarity), they now operate as ‘bargaining agents’ for individuals covered by agreements. And while awards still provide a reference point for bargaining or informal arrangements, they do so as a wage standard that is declining relative to community movements (Healy, 2011). For those with no bargaining power, the comprehensive analysis by Evesson et al.…”