Lowest paid workers miss out on wage increase

7 July 2009

ACOSS has expressed disappointment at the Fair Pay Commission’s decision to leave the Federal Minimum Wage unchanged at $14.31 per hour. ACOSS’ submission to the Commission called for a modest increase to at least maintain the real value of the minimum wage.

“The minimum wage is an important safety net for low paid workers and should provide a decent standard of living so that Australians who depend on the minimum wage do not go backwards,” said Clare Martin, CEO, Australian Council of Social Service.

“In tough economic times, wage rises across the economy should be modest to help prevent job losses, but those on the lowest incomes shouldn’t have to bear the full brunt of wage restraint.”

“A person living on $544 a week, who is renting, and has costs like transport, childcare and basics essentials like food must budget carefully to make ends meet. A modest increase would have helped keep pace with living costs, especially increased housing costs.”

“Higher minimum wages do not automatically lead to higher unemployment levels among the low skilled.
Modest increases in minimum wages over the last decade have not prevented employment from growing strongly and unemployment from falling to low levels by OECD standards.”

Recent research by the OECD on the effects of minimum wages on employment finds that they generally have little or no impact on employment among adults, though they may effect employment among young people in the absence of lower rates of pay within this group.

Who depends on the Minimum Wage?

  • 40% to 50% are under 25 years
  • A majority are women
  • People with low educational qualifications
  • About one third are the sole breadwinners in their household.
  • About two fifths are the highest earner in their household.
  • Higher incidence among employees living outside major cities
  • Mainly come from the retail, hospitality, and community services industries, and mainly from low skilled occupations such as elementary or intermediate service workers, labourers, and production workers.

Media Contact: Clare Cameron, ACOSS – 0419 626 155