The living wage crisis in Australian industrial relations

ABSTRACT

The recent proliferation in Australia of systematic wage underpayment, or wage theft as it is known in the US, is stripping workers of the ‘living wage’, once a cornerstone of Australia’s industrial relations system. This paper considers the dimensions of this phenomenon and some of the policy recommendations for regulatory reform to reduce employer non-compliance with minimum wage standards. The paper concludes with proposals for other measures that may also help arrest what is becoming a living wage crisis and restore fair and reasonable wages to workers, regardless of employment arrangement or status.¹

Notes

1. This article is an edited version of the Presidential Address to the 31st Conference of the Association of Industrial Relations Academics of Australia and New Zealand (AIRAANZ), held in Canberra, 8–10 February 2016.

2. Minimum legal wages are established through a three-tier system in Australia. The Fair Work Commission determines a national minimum hourly wage each year. In practice, this is supplemented by the second tier, modern award wage rates (determined by the FWC) and, the third tier, rates negotiated in enterprise agreements (which are registered by the FWC) where these apply. Junior employees (workers under 21 years of age) are entitled to a percentage of the adult wage which is scaled upwards from the age of 16.

Additional information

Notes on contributors

Louise Thornthwaite

Louise Thornthwaite works in the Department of Marketing and Management at Macquarie University, Sydney. From February 2016 to February 2017, she was President of the Association of Industrial Relations Academics of Australia and New Zealand (AIRAANZ).