Australia’s Minimum Wage: Too High, Too Low or Just Right?
With the unemployment rate in Australia at 6.1 per cent and the working poor suffering financial stress, the focus now shifts to whether or not minimum wages across the country should be raised or lowed to help compensate for the changes.
Australia’s minimum wage was recently raised to $16.87 per hour, which equates to US$14.81. Meanwhile, while the minimum pay in America is only US$7.25, well below that of other advanced industrial nations.
Until earlier this year, Australia has been the main case study of a country with a consistent rising national wage floor in addition to an increase in hiring. Minimum wage has increased nearly every year since the late 1990s, as the economy prospered from the commodities boom. But at the same time, unemployment was down below six per cent for more than a decade through the middle of 2014.
Times have indeed changed.
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Some economic analysts believe higher mandatory wages lead to domestic spending, which will help create economic growth. Those opposed argue high wages discourage businesses from employing new workers, which in turn leads to higher rates of unemployment.
Recently, the Australian Council of Trade Unions’ (ACTU) call for a $27 per week increase to the minimum wage of 18.8 per cent of the workforce is expected create an economic stimulus of $3.1 billion per year. It argues that increasing the minimum wage will help boost consumer confidence and economic demand. In addition, the Reserve Bank of Australia (RBA) kept interest rates steady during the month of March at 2.25 per cent, and believes consumer confidence is needed to boost jobs and economic growth.
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Meanwhile, retail trade increased to 8.7 per cent in February, showing employers can indeed afford to increase minimum wages. Employers claim rumors that the labour market is not improving are also false, as the drop in unemployment rate to 6.1 per cent in March from 6.4 per cent indicates. Australian Unions encourage the Fair Work Commission to consider the economic stimulus impact the ACTU’s minimum wage claim will bring.
Despite labour productivity being high, profits being up and salaries of CEOs on the rise, the wages for cleaners and those who work in shops and restaurants are the lowest in the country. These are signs that Australia is quietly developing a working poor that has to deal with financial instability and poverty.
So in short: A $27 weekly increase is actually economically possible, appropriate and necessary to prevent a growth in the working poor.
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.