Australia's poorest better off despite lagging minimum wage

WHILE the minimum wage has not markedly risen relative to other wages in the past 25 years, increases in government welfare have raised the wealth of Australia's poorest.

A paper by Rob Bray of the Australian National University's College of Business and Economics has analysed 25 years of data on the minimum wage.

Mr Bray said his analysis had found the minimum wage was a far cry from what is was when first introduced, and even the level in the mid-1980s.

However, in the past 25 years, the minimum wage had moved from the wage of a family to that of a single person.

"A consequence has been that while the minimum wage has remained at around the same level, the income of a traditional single-breadwinner family with younger children earning the minimum wage has increased by more than 70%," Mr Bray said.

"This has dramatically improved family living standards without putting pressure on wages.

"It is, however, a reform which is coming to an end, and we have to start thinking about the future."

Mr Bray said the questions over the minimum wage for the future could not simply be answered through the statutory annual review.

"Rather, there is a need to think about where we want to be in 20 years' time, and the other policies we might need to put in place to get there," he said.

"These days, the traditional single-breadwinner family reliant upon the minimum wage accounts for just 1.1% of couple families with dependent children."

Mr Bray's paper also recommended the creation of an income tax credit to help supplement lower paid earnings.

Topics:  minimum wage

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