Ross Gittins’ column in Saturday’s Sydney Morning Herald was devoted to the topic of minimum wages. Among other things, he explained the ‘dynamic monopsony’ model of labour markets. These models are associated in particular with Alan Manning of the London School of Economics, who set out the theory at length in his 2003 book Monopsony in Motion: Imperfect Competition in Labor Markets.
I have a new post at the Chifley Research Centre on the recent decision to hold the real minimum wage constant. Please read it!
Today, Barack Obama announced his intention to push for the US federal minimum wage to be lifted to $9 per hour by 2015, and then indexed to inflation.
In case anyone is interested in how the Australian minimum wage[fn1] stacks up against other advanced economies, I thought I’d post a few charts. As at February 2012, the National Minimum Wage is $15.96 per hour, which works out to $606.40 per week for full-timers. The rate is higher if you’re a casual employee (and therefore don’t accrue paid annual leave and sick leave). To find the minimum wage that applies in a particular circumstance, try the Fair Work Ombudsman.
Economists usually think that people’s revealed preferences (what they do) are more important than their stated preferences (what they say they’ll do). With that in mind, let’s consider George Calombaris’ claim that the minimum wages he has to pay his staff on Sundays make it uneconomical to open his restaurant(s). Is it true? Well, he claims that it is uneconomical to open on Sundays, yet he nevertheless opens on Sundays. Why would he do that if it were true that his costs exceeded his revenue?
This blog represents my personal views, and not necessarily those of my employer, the ACTU.
Nevertheless, there is a fair amount of crossover between the things I write about on this blog and the things I write about for work. Given this crossover, I thought some readers might be interested in this piece I wrote for the ACTU’s Rights at Work blog (re-posted at The Drum).
The post was written in response to a front page article in Monday’s edition of The Australian, in which some retailers and retail associations made a few claims about the state of their industry, and blamed their alleged woes on the IR system and minimum wages. As you might imagine, I don’t agree with their diagnosis.