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The decline of minimum wages in Australia

Bill Mitchell crunches the numbers regularly and well. These graphs tell a grim story

Australia_FMW_GDP_hours_wkd_2005_2016
The graph above shows the evolution of the real Federal Minimum Wage (red line), GDP per hour worked (blue line), and the Real Wage Price Index (green line), the latter is a measure of general wage movements in the economy. Th graph is from June 2005 up until June 2016 (indexed at 100 in June 2005).
By June 2015, the respective index numbers were 117.4 (GDP per hour worked), 107.1 (Real WPI), and 104.1 (real FMW). This tells us that all workers have failed to enjoy a fair share of the national productivity growth, and that minimum wage workers in Australia have been largely excluded from sharing in any of the productivity growth.
Australia_FMW_AWE_Ratio_June_2016
Successive minimum wage decisions have forced workers at the bottom of the wage distribution to fall further behind in relative terms.
In the December-quarter 1993, minimum wage workers earned around 55 per cent of the Full Time Adult Ordinary time earnings. By June 2016, this ratio will have fallen to around 44 per cent. There has been a serious erosion of parity over the last 18 years

 

 

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