Higher minimum wage not a win for Australians, firm argues

By Naomi Neilson|16 July 2019

Australian workers on the minimum wage now have more purchasing powers than any other country in the world, according to new 2018 OECD figures, but one firm says it is not all good news.

However, according to McDonald Murholme, while this appears to be a positive move for low-income earners, the increase in other factors like tax and the cost of living does not actually mean they are reaping the benefits of a higher minimum wage.

Managing director Alan McDonald said: “It is claimed employees in Australia benefit from one of the highest minimum wage standards in the world; however, living costs and taxes are so high that it negates this benefit.”

A 3.5 per cent increase to the minimum wage in July 2018 saw Australia move ahead of Luxembourg. While the study did not take into account another 3 per cent increase in July 2019, Australia is likely to still top the ratings this year.

Mr McDonald said this statistic is “nothing to crow about” and said employees on this wage are still suffering from the high cost of living and high energy prices.

He added that employees outside of Australia’s wealthiest suburban areas suffer from the increase to the “highest minimum wage in the world”, as employers cannot afford to hire staff on the minimum wage, effectively cutting out opportunities for work.

“The distribution of wealth has widened the minimum wage of low-income earners flat line over more than a decade and the high-income earners wealth grew significantly over that period,” Mr McDonald said.

“No one should believe that the minimum wage earners are well off; these statistics don’t reflect the reality of those on the low.”

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Higher minimum wage not a win for Australians, firm argues
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