Comments on Matthew Wood "Wage policy ‘coup’ marks debasing of politics by hyper-democracy", 23/07/2015
In terms of living wages, Australia has arguably done it already. I remember reading an article possibly in the Conversation that explained the workplace relations in Australia and its minimum wages.
That article mentioned that in the past there was a case where the judge defined minimum wages as something that can sustain a reasonable family life. In another word, Australia's minimum wages are far from the market driven minimum wages when demand for and supply of labour are in equilibrium.
In reality, the minimum wages in Australia are much higher than in the US and the UK, as much as twice or more than in those countries.
In comparison, the proposal for the introduction of a National Living Wage in the UK by Chancellor George Osborne, irrespective its merits or otherwise, to the most is a catch up to the Australian practice that has been in place for a long time.
Showing posts with label minimum wage. Show all posts
Showing posts with label minimum wage. Show all posts
2015-07-23
2011-04-04
Policy strategies for increasing labour participation
Comments on Judith Sloan “PM won't get two million more into jobs this way”, 4/04/2011, http://www.theaustralian.com.au/national-affairs/pm-wont-get-two-million-more-into-jobs-this-way/story-fn59niix-1226032907131
There are a number of good policy options that can increase labour participation rates, market flexibility, economic efficiency and people's living standards.
1. The employment income for people over a certain age, say, 60, or 65 should not be taxed at all and should not be counted to affect their other income for tax purpose.
2. The minimum wages should not be allowed to increase more than inflation plus a fraction of economy wide labour productivity increase to make it a safety net but not to decrease market efficiency.
3. People on minimum wages and standard working hours of 7.30 should not be taxed, that is, the minimum tax threshold should be set at least at that level and indexed with the rate of increase in minimum wages.
4. To encourage people to reduce welfare trap and dependence, the welfare withdrawal should ensure that their marginal tax rates don't increase within a sufficient level of income.
5. Welfare benefits should generally not be allowed to exceed people on minimum wages, unless they are seriously medically handicapped.
There are a number of good policy options that can increase labour participation rates, market flexibility, economic efficiency and people's living standards.
1. The employment income for people over a certain age, say, 60, or 65 should not be taxed at all and should not be counted to affect their other income for tax purpose.
2. The minimum wages should not be allowed to increase more than inflation plus a fraction of economy wide labour productivity increase to make it a safety net but not to decrease market efficiency.
3. People on minimum wages and standard working hours of 7.30 should not be taxed, that is, the minimum tax threshold should be set at least at that level and indexed with the rate of increase in minimum wages.
4. To encourage people to reduce welfare trap and dependence, the welfare withdrawal should ensure that their marginal tax rates don't increase within a sufficient level of income.
5. Welfare benefits should generally not be allowed to exceed people on minimum wages, unless they are seriously medically handicapped.
2009-07-31
Balance jobs and low wages
Comments on Michael Stutchbury “Old IR tribunals don’t work”, 31/07/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/old_ir_tribunals_dont_work/
Michael, while there is some logic in maintaining the minimum wages level unchanged by the Fair Pay Commission, there is also logic in the 2.8% increase for low paid by NSW Industrial Relations Commission. It is a matter of balance, and views of course.
You applauded the FPC decision and criticises NSW IRC decision. That is understandable, but wrong.
Just think about this question, if it will reduce the welfares of 1000 low paid workers to keep or increase 1 job, is it still good enough from public policy point of view?
Besides, what if all other wages than the minimum wage increase? Is it fair for the lowest paid?
Further, there is also a responsibility for employers to be fair and share some costs of bad times.
Yes, it would be always good to keep as many people work as possible and it is beneficial, but one has to recognise there are costs of doing it and balance the costs and benefits.
To argue just purely for jobs at no costs is not good enough.
Michael, while there is some logic in maintaining the minimum wages level unchanged by the Fair Pay Commission, there is also logic in the 2.8% increase for low paid by NSW Industrial Relations Commission. It is a matter of balance, and views of course.
You applauded the FPC decision and criticises NSW IRC decision. That is understandable, but wrong.
Just think about this question, if it will reduce the welfares of 1000 low paid workers to keep or increase 1 job, is it still good enough from public policy point of view?
Besides, what if all other wages than the minimum wage increase? Is it fair for the lowest paid?
Further, there is also a responsibility for employers to be fair and share some costs of bad times.
Yes, it would be always good to keep as many people work as possible and it is beneficial, but one has to recognise there are costs of doing it and balance the costs and benefits.
To argue just purely for jobs at no costs is not good enough.
2009-07-08
Minimum wage needs to be fair
Comments on Michael Stutchbury “Harper’s ruling will save thousands”, 8/07/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/harpers_ruling_will_save_thousands/
The determination of the legal minimum wage for the lowest paid should always be a fine balance act, and especially so at the time of a recession or economic down turn.
However, that does not mean that a wage freeze for those lowest paid is right even for the current circumstances. The following argument by the author is disturbing:
“Since it began in 2006, the FPC has maintained the minimum wage floor in real or after-inflation terms. And this has been topped up by higher family payments, low-income tax offsets and now the budget stimulus handouts.”
If that is true, it means there has no increase in wage for any productivity gains during that period. That is hardly a fair outcome for those lowest paid workers.
One argument may be that there has no productivity gain since 2006 by those lowest paid workers. While that may be true, it needs to be proven.
To trade off a justifiable right wage structure with low-income tax offsets was not a good policy. It does not encourage people to work and get compensated through wage earnings. It encourages a welfare dependent culture. It also distorts tax structure and tax on other people more heavily than it should.
Of course, the current government’s act is also condemnable. It does not have the courage to say how much the lowest wage should be increased. It is not good enough for a government and its ministers to say a considered increase without specifying the degree or quantum, and then complaining the outcome of the Fair Pay Commission’s decision afterwards.
The government should make its stance clear. It is up to the Commission to decide what the best outcome should be and is after considering every side and taking account the circumstances. Everyone has a job to do. The government cannot be opportunistic.
The determination of the legal minimum wage for the lowest paid should always be a fine balance act, and especially so at the time of a recession or economic down turn.
However, that does not mean that a wage freeze for those lowest paid is right even for the current circumstances. The following argument by the author is disturbing:
“Since it began in 2006, the FPC has maintained the minimum wage floor in real or after-inflation terms. And this has been topped up by higher family payments, low-income tax offsets and now the budget stimulus handouts.”
If that is true, it means there has no increase in wage for any productivity gains during that period. That is hardly a fair outcome for those lowest paid workers.
One argument may be that there has no productivity gain since 2006 by those lowest paid workers. While that may be true, it needs to be proven.
To trade off a justifiable right wage structure with low-income tax offsets was not a good policy. It does not encourage people to work and get compensated through wage earnings. It encourages a welfare dependent culture. It also distorts tax structure and tax on other people more heavily than it should.
Of course, the current government’s act is also condemnable. It does not have the courage to say how much the lowest wage should be increased. It is not good enough for a government and its ministers to say a considered increase without specifying the degree or quantum, and then complaining the outcome of the Fair Pay Commission’s decision afterwards.
The government should make its stance clear. It is up to the Commission to decide what the best outcome should be and is after considering every side and taking account the circumstances. Everyone has a job to do. The government cannot be opportunistic.
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