The paper “ Minimum Wage Regulation in Australia, Views Reflected in the 2011-2012 Minimum Wage Review Decision of Fair Work Australia” is a forceful variant of case study on finance & accounting. Every year the minimum wage in Australia is reviewed to reflect the current economic conditions to reduce hardships for people who earn the least income. The Australian Fair Pay Commission is responsible for these reviews and it considers various factors like inflation, economic growth, and GDP. In making its final decision the commission is assisted by the view of various stakeholders.
The stakeholders present their views through various submissions to the commission. The commission considers these submissions and draws on them to make the final decision to review the wages. This paper presents the rival submissions of the Australian Council of Trade Unions (ACTU) and the Australian Chamber of Commerce and Industry (ACCI). Submissions of the Australian Council of Trade Unions (ACTU) and Australian Chamber of Commerce and Industry (ACCI) about their approach to minimum wage determination. In the submissions made by ACTU and ACCI, the approach that they have adopted to ensure that there is minimum wage submission is through the establishment of fairness in minimum wages.
Australia has been rated to have a relatively high wage rate as compared to other 21 advanced economies in the OECD region. ACCI also states that the net average wage in Australia is 44% compared to these countries. To make the approach of minimum wage using the Fair work Act, there has to be the inclusion of both employed and unemployed in the Australian economy as it is through this that there will be the right decisions and rates are made.
The approach is of much importance in any consideration that will be made because, through this approach, Annual Wage Reviews (AWR) will be compared to see if they give any difference in the rates to be charged. By employing decisions made by the Australian Fair Pay Commission in the 2009-2010 AWR, the ACTU sought to look for ways to promote net safety rather than economic growth. With an increase of minimum wages in 2010 and 2011, it saw a change in the cost of living in the households where $26 in a week lead to class 14 raise its wage to 4.8% and C10 rose to 4.1%.
The approach adopted of fair pay will have an economic impact on Australia and will mostly affect the industrial sector and the labor market. According to ACCI, the beginning of 2008 saw a less than 3% growth in the labor market that lead to decreased unemployment that had a negative impact in the labor market due to laborers being lowly paid. At the year-end of December 2011, there was a recorded growth of 2.3% due to an increase in wage rate that saw a lot of employment in the mining industries.
With a rise in the minimum wage and by social inclusion in any decision, there will be growth in economic conditions ranging from the prices of goods and services, wages given to laborers, profits generated in industries and overall productivity in the economy. ACTU reveals that by using the minimum wage approach, there will be reduced inflation though there will be a constant wage growth that will grow at an average pace.
There will be increased profits in the national income due to the increase in wages that will cater to the unforeseen financial crises. Due to the growth in profits, there will be more employment of award reliant workers in all industrial sectors and it is through this that Australia will continue to report low rates of unemployment than in any other economy in the Organization for Economic Co-operation and Development (OECD) region.