A new research brief by free-market think tank the Institute of Public Affairs has refuted claims by unions that low-paid work is a ‘dead-end job’ and that people on the minimum wage are trapped.
“Low-paid work performs an important function as the first rung of the career ladder,” said Kurt Wallace, Research Fellow at the IPA.
“Contrary to suggestions that low-paid work is a ‘dead-end job’, these jobs have high upward income mobility. Over half of low-paid Australian workers move to higher-paid work within a year, 64 per cent move to higher-paid work within two years, and 75 per cent move to higher-paid work within five years.
“Australia’s minimum wage, which is the highest in the world and almost double the OECD average, disadvantages young and low-skilled workers by removing the entry rung of the career ladder. By making all work below $19.49 per hour illegal, the minimum wage prevents many Australians from entering the workforce, building careers, and experiencing the dignity of work.”
“Australia’s stringent labour regulation significantly raises the cost of employment, making it difficult for those who lack experience to find work. The superannuation system and leave entitlements alone increase the minimum wage to $25.34 per hour worked.”
“According to the World Economic Forum, Australia has the 105th least flexible labour market out of 140 nations which undermines the ability of businesses to recruit and retain high quality workers.”
“The government needs to reduce barriers to employment to combat rising youth underemployment. 38 per cent of the 15 to 19 year old workforce are either unemployed or underemployed and an estimated 250,000 Australians aged 15 to 24 are not engaged in work, study, or caring for children.”
“All work provides dignity, skills, and financial independence. Low-paid work is an important rung toward higher-paid work and career success. Australia’s high minimum wage and restrictive labour regulation undermines the ability of young people to enter the workforce and experience the dignity of work,” said Mr Wallace.
Download the Parliamentary Research Brief here.