Australia and Canada share much in common, but one striking point of difference is the minimum wage. While Canada has been engulfed in a debate around the minimum wage in recent months, it’s a given in Australia that a barista making your latte or a fast-food worker serving your burger is earning at least $20 an hour.
The principle that employees must be paid a “living wage” dates back to a 1907 decision of the Commonwealth Court of Conciliation and Arbitration, which stated that if an employer was unable to pay a living wage, it was not entitled to operate a business. A living wage was defined in the decision as being sufficient to permit an unskilled worker, a dependent spouse and three dependent children to live in “frugal comfort.”
Today, the majority (around 60 per cent) of all Australian employees are covered by one of two collectively determined standards – Modern Awards or Enterprise Agreements. Modern Awards set wages by industry or occupation and take into account levels of experience, skill and responsibility within the workplace. Additional pay is usually required for overtime and work on nights and weekends. Enterprise Agreements are much like Canadian collective agreements and largely exist at the workplace level. They must build upon minimum Modern Award standards, often through a wage increase of some description.
Wages for service sector jobs tend to be much higher than in Canada, where the dollar currently trades at par with the Australian currency. Entry-level fast-food workers, for example, are paid $20.08 an hour as a base hourly wage. Pay goes up to $25.10 on Saturday, $29.12 on Sunday, and overtime hours are $30.12 for the first two hours and $40.16 for each hour thereafter. On top of this, employers pay 9.5 per cent of wages to every employee’s nominated retirement fund. Workers who are non-permanent “casual” employees are generally paid a further 25 per cent of their wages on top of these amounts.
Has the economy crumbled under the weight of high wages? No. The Australian economy has fared quite well by international standards. GDP per capita is healthy at around US$48,000, compared with Canada’s $44,000. The unemployment rate is low, at 5.4 per cent nationally. There has not been a recession since the early 1990s. This is arguably in part a result of the buoyancy of demand created by high wages.
“if an employer was unable to pay a living wage, it was not entitled to operate a business”
Australia pays fast-food workers $20 an hour and the sky hasn’t fallen
Mooncustafer 