Journal article
MINIMUM WAGES AND THE ‘WORKING POOR’
M Wooden, R Wilkins, SEAMUS McGUINNESS
Economic Papers | WILEY | Published : 2007
Abstract
This paper uses data from the HILDA Survey to examine whether or not a minimum wage increase can do much to alleviate poverty or reduce earnings inequality. It is concluded that any poverty reducing effects will be modest. Most low-wage employees are not found living in the poorest households, and among those that are, many combine part-time work with receipt of a government benefit. It is also concluded that minimum wage increases are likely to be of limited effectiveness in protecting the living standards of the ‘working poor’. This is because the large increases in hourly wages experienced by most low-wage workers do not always translate into similarly large increases in annual earnings.
Grants
Awarded by ARC Discovery Grant
Awarded by Australian Research Council
Funding Acknowledgements
Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. This paper was supported by an ARC Discovery Grant (DP0663362) and uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Survey Project was initiated and funded by the Australian Government Department of Families, Community Services and Indigenous Affairs (FaCSIA) and is managed by the Melbourne Institute of Applied Economic and Social Research. The findings and views reported in this paper are, however, those of the authors and should not be attributed to either FaCSlA or the Melbourne Institute. The authors also thank colleagues at the Melbourne Institute for helpful comments, suggestions and assistance, especially Paul Agius, Simon Freidin, Diana Warren, and Nicole Watson.