Quick questions on Labour market policies in Australia (HSC Economics Topic 4)

Australian wages are determined through three streams established by the Fair Work Act 2009:

The Fair Work Commission (FWC) is the national workplace relations tribunal. Its functions include:

The National Employment Standards (NES) are 11 minimum entitlements that apply to all employees:

Secure Jobs, Better Pay Act 2022. - Stronger multi-employer bargaining (especially in feminised, low-wage sectors). - Single interest bargaining authorisations. - Prohibition on pay secrecy clauses (employees can disclose their pay). - Ban on "zombie agreements" (pre-2009 individual agreements).

The Wage Price Index (ABS, cat. no. 6345.0) measures the change in wages controlling for changes in the composition of the workforce.

Active labour market programs target unemployment directly:

Inflation channel. Wage growth in excess of productivity growth feeds into unit labour costs and inflation. The RBA monitors WPI closely; sustained WPI growth above around 3.5 percent risks inconsistency with the 2 to 3 percent inflation target unless productivity rises.

1. Minimum wage and youth employment. Higher minimum wages raise incomes for those in work but may raise youth and low-skilled unemployment.

Set by the Fair Work Commission annually. Cover around 25 percent of employees, mostly in retail, hospitality and personal services. The national minimum wage in 2024-25 is $24.10 per hour (around$48,000 per year for a full-time worker).

Collective agreements negotiated between an employer and its employees (often through a union), approved by the Fair Work Commission. Cover around 35 percent of employees, mostly in manufacturing, mining, healthcare and the public sector.

Above-award arrangements between an employer and individual employee. Cover around 40 percent of employees, mostly in finance, professional services, ICT and management roles.

- Stronger multi-employer bargaining (especially in feminised, low-wage sectors). - Single interest bargaining authorisations. - Prohibition on pay secrecy clauses (employees can disclose their pay).

- New "right to disconnect" for employees outside working hours. - Casual employment redefined with a right to convert to permanent after 12 months. - Employee-like work (gig economy) brought partially within the FWC's jurisdiction.

- 20 weeks at the national minimum wage from 1 July 2024. - Rising to 26 weeks by 1 July 2026. - Super contributions on PPL from 1 July 2025.

Wage growth in excess of productivity growth feeds into unit labour costs and inflation. The RBA monitors WPI closely; sustained WPI growth above around 3.5 percent risks inconsistency with the 2 to 3 percent inflation target unless productivity rises.