Welfare Reform on the Web (July 2011): Minimum Wage - overseas

What role do safety net wage adjustments play in alleviating household needs?

J. Healy

Journal of Industrial Relations, vol. 53, 2011, p.169-192

For award-only workers in Australia, the minimum rate of pay set in their award (or more recently their Pay Scale) is the effective rate of pay. Periodic wage increases are determined for these workers through a centralised process, resulting in 'safety net adjustments' to award rates of pay. There is no bargaining about the minimum applicable rate of pay for them. This article adds to what is known about whether the low wage earners affected by safety net adjustments actually live in financially disadvantaged households. Results show that the workers of interest are predominantly found in households near the middle of the income distribution, rather than at the bottom end, because they typically live with other, higher-paid workers. The minority living in single-income households are more likely to experience financial stress. Any safety net maintained to alleviate household needs should be especially focused on the circumstances and prospects of this single-income group.