In a move that will directly benefit the square root of fuck all people, the Australian national minimum wage was raised by 3% to $19.49 this week.
If you are reading this from a country other than Australia, yes, that wasn’t a typo; the Australian minimum wage is $19.40 an hour!
Or;
US $13.41
€12.05
£10.64
Look at all the goods and services you’ve bought in the last year. It’s a safe bet none of them were made in Australia. Coincidence?
Before we get into the economics and demographics of Australia’s farcical minimum wage, let’s take a quick journey down a NLP cul-de-sac…
To reduce neuro-linguistic programming to a pithy sentence of dubious accuracy; it is the theory that specific words act as triggers to people’s behaviour. Perhaps that’s what the Australian socialists who came up with the leviathan bureaucracy around the central planning of wages were trying to achieve with the names they gave various elements of the legislation and policies.
In reality though, the persuasiveness of their nouns tends to have the opposite effect. As anyone who’s met a highly dangerous or tough individual has ever realised, if you must tell people you are tough, you probably aren’t. Or, more amusingly, the reason why the 1.85m tall Tiny Tim was called “tiny” was irony.
Hence, we have the Fair Work Commission ruling on Modern Awards and Penalty Rates.
What’s good is bad, what’s bad is good
You’ll find out when you reach the top
You’re on the bottom
So, how many people get this mythical $19.40 an hour?
Nobody really knows. The Australian Bureau of Statistics have one of the worst reputations in the developed world for collecting accurate data on employment. A Melbourne academic study from over a decade ago estimated it was about 3% of the working population (which was about half of the total country). However, there are two factors to bear in mind when reading that study; firstly, academia is populated exclusively by those with at least a left of centre bias and, in many cases, extreme left wing views and, secondly, it’s bloody Melbourne, a city still feeling the disappointment from the fall of the Berlin Wall and the discrediting of Walter Duranty’s New York Times’ reporting on Stalin’s Russia.
Let’s assume the estimates are in the ballpark. Half the population are employed, so that’s about 12.5m people, of which, 3% are on the minimum wage. So about 375,000 people.
What work do these people do? Well, it’s easier to tell you what work they don’t do. Anything covered by this list for a start…..
Take a moment and follow that link to the Fair Work website and pick a random job you’d think is an entry level, minimum wage role. Waiting tables at a café, for example? Nope, that’ll be covered by the Hospitality Modern Award, so they will receive at least the minimum wage or higher plus other benefits such as holiday pay. Similarly, abattoir workers, concrete mixers, grape pickers, sugar cane cutters, sheep shearers, and fish gutters are all on their own “minimum wage plus” deal.
Let’s pause for a moment and state a fact most Australians aren’t aware of; Australia is the only country in the world that isn’t a socialist dictatorship that legislates wages by industry in this way.
Bill’s Opinion
At a stroke, the Fair Work Commission increased the minimum wage by 3%. My statement at the start of today’s rant is inaccurate, it will benefit many people because many Modern Awards are pegged to this rate, this has the effect of increasing those pay rates by 3%.
Great news; everyone has more money to spend.
No so great news; every product or service manufactured in Australia to be exported abroad has just had its input costs increased by at least 3%, thus negating any positive impact of the trashing of the currency by the RBA when they cut interest rates next month to save the banking industry.
But more importantly, who exactly benefits from this ridiculously bureaucratic centrally-planned wage system?
My guess, in order of benefit;
1. Employment lawyers,
2. Union officials,
3. Labor (sic) MPs, both State and Federal,
98. Minimum (or close to) wage workers.
The only reason I employ anyone is to make a profit on them. If their pay goes up without a matching increase in productivity, I must either pass on the pay increase (with a suitable mark-up), or think hard about how badly I need that headcount on my payroll.
Economic theory works differently here.
A recession will be fun though.
What Michael van der Riet said.
First pass I read this as a snarky inference that only 6% of Australians work and thought, “when did they become Italy?”
Yes, not the most precise language.
Unemployment is apparently about 5%, but with the RBS collecting the data there might be a +- margin of error of two standard deviations divided by Pi subtracted from the number you first thought of.
This will bring the lowest cost (daytime weekdays) of a barmaid to $27.55 pr hr.
The upper end will be Sunday, if she’s worked 40 hrs that week, $48.71
By closing time, every day, each bar staff will be costing me $34.30 per hour.
If I pay any lower, I’m risking becoming one of those fined a zillion dollars in a court case brought by the Fair Work Ombudsdonkey.
This is getting out of hand.
Jesus. No wonder a pint is so eye wateringly expensive in this country.
Those costs are regardless of skill level or experience.
That is the bare minimum cost to me.
Some wankpuffin who was a professor of industrial relations (apparently there is such a thing) objected vehemently to me banging on loudly about how “restrictive” I found the award system to be.
I queried this, he confidently went on about how I’m not restrained at all by the award system.
He chirpily informed me (like I was a slow learner) that I am free at any time to pay the staff more than the award.
This was about as well received by me as if I’d walked from John O’Groats to Lands End only to be told to walk back again.
He will never know how close he went to requiring extensive maxillo-facial surgery.
There are some interesting studies on this, one example here; https://wol.iza.org/articles/employment-effects-of-minimum-wages/long
The conclusion seems to be that, similar to the Laffer Curve effect, there’s a point at which the negative impact to employment kicks in and the higher minimum wage harms more than helps.
The problem is that it’s a different rate in different countries, towns, rural areas.
What’s certain though, if any country is likely to hit the negative effect, it’ll be the one with the highest (or second highest after Monaco) minimum wage.