Understanding what the minimum wage is and how it fluctuates is an important consideration for every small business owner. Whether you’re an employer or team member, you likely manage or work with a team filled with casual and seasonal employees. As such, it’s important to know the Australian minimum wage so you can always be sure you’re getting what you deserve.
History of the minimum wage in Australia
The Australian minimum wage is steeped in history, with notable events dating back to the late 19th century. After massive strikes in the 1890s, social and economic pressures forced politicians at the time to give a voice to the under-served worker, and in the subsequent decade the dream of a minimum wage came to fruition.
Throughout the 1900s, major events changed the course of the minimum wage’s history, with the Great Depression, global wars and women’s rights all affecting ups and downs in how much the average employee earned. However it wasn’t until reforms in awards and work practices in the ’80s and ’90s that Australia became one of the best-paying countries in the world for the minimum wage.
Nowadays, the average minimum-wage employee earns over $700 before tax, and that figure increases year on year due to inflation and other factors.
History of the minimum wage in Australia
According to Trading Economics and the Fair Work Commission, the following table shows how much the minimum wage has changed in recent years. It’s interesting to note that prior to 2010, the minimum wage stayed exactly the same for both 2008 and 2009 ($543.78), no doubt due to the Global Financial Crisis:
Minimum wage myths
Unfortunately, some Western countries – such as the United States – have little to no regulations around their minimum wage, and that sometimes reflects badly on other Western nations like the UK and Australia. However we certainly live up to the ‘lucky country’ nickname in terms of our minimum wage. Here are some common myths:
If minimum wages go up, jobs go down
Sure, it sounds like it makes sense. If people are getting paid more money, then that must mean there are fewer jobs, right? But that myth has been busted by multiple studies, particularly from the Productivity Commission, who revealed that “modest increases in Australia’s minimum wage are unlikely to measurably affect employment”.
Small businesses can’t afford regular increases to the Australian minimum wage
It’s true that many small businesses run on narrow margins, and excess costs can be the difference between a quarterly loss or profit. However the minimum wage has the opposite impact on a business’s ability to pay their team. Instead of not being able to afford the annual rise in minimum wage, studies reveal that minimum-wage increases actually create jobs.
Low-paying jobs are only for the unskilled
Casual employees are often seen as only being students who may just work weekend jobs. While it’s common for those studying to take on casual or seasonal employment, that doesn’t necessarily make them “low skilled”. In fact, students are the skilled workers of the future. And in addition to setting the minimum wage, Australian states and territories also set the wages for most apprentices and trainees in certain industries. Minimum-wage jobs might be a starting point for some – but they definitely aren’t reserved for the unskilled.
The government shouldn’t be able to control wages
Some believe that only business owners should be in control of how much they pay their team. But as we’ve seen in other countries like the US, that can lead to severely low-paying conditions and greater problems on the economic market as a whole. The Fair Work Commission rightly states that the minimum wage is a “signalling effect”. Essentially, that means it acts as a way to show employers and employees what independent tribunals believe is a fair wage. And when it comes to quality of life, that’s exactly what is needed for minimum-wage employees.
Staying abreast of changes to the minimum wage is key for small business owners, especially those who have to manage tight budgets and regular turnover in industries with lots of casual employees. Workforce management tools can help ease the pressure and streamline time-consuming tasks at work.
Find out how to better manage your workplace and your team with Deputy.