Taking the Low Road: Minimum Wage Determination under ‘Work Choices’

By Sally Cowling and William Mitchell

Explores the implications of shifting responsibility for minimum wage determination from the Australian Industrial Relations Commission (AIRC) to the AFPC.

The authors set out the Government's rationale for changing the institutional framework through which minimum wages are determined. Section 3 examines the relationship between minimum wages and employment outcomes in Australia to assess the veracity of the assumptions that underpin the objectives specified in the Work Choices Bill. Section 4 provides detailed analysis of differences between the AIRC and AFPC with respect to the composition and independence of Commission members; the legislative criteria guiding wage decisions; and the role accorded to these decisions in the pursuit of broader economic and distributional goals such as prosperity and fairness. Finally, Section 5 argues that the Work Choices legislation will act as a downward drag on the pay and conditions of minimum wage workers and sets out an alternative policy approach to attaining the Work Choices objectives. This approach requires a State commitment to full employment and the maintenance of a decent living wage.

Centre of Full Employment and Equity, University of Newcastle. Working Paper 05-18