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Who Are the Low Waged?

Author

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  • Seamus McGuinness

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • John Freebairn

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

This paper provides pictures of low pay adult employees in Australia in 2004 drawing on data from the HILDA survey. The low waged are disaggregated into full-time and part-time employees. It is conservatively estimated that approximately 13 per cent of employees can be classified as low waged with just under 5 per cent assessed to have earned below the federal minimum wage in 2004. Estimates from multivariate probit models reveal that low wage employees are more likely to have casual status, single marital status, a low educational attainment, aged 21 to 30 or 60 plus, be employed in small firms, non-unionised and have lower occupational tenure. The magnitude of effect of these distinguishing characteristics is much larger for part-time versus full-time employees. Low waged employees, and more so in the case of full-time employees, are spread fairly evenly across households with different incomes, however, some differences are apparent when the data are disaggregated by employment status. For about a half of low waged employees, a low waged job, especially if it is full-time, is a stepping stone to higher paying jobs in the future. However for a sizeable proportion of low waged part-time employees, low pay is either a continuing state or a precursor for movement into labour market inactivity.

Suggested Citation

  • Seamus McGuinness & John Freebairn, 2007. "Who Are the Low Waged?," Melbourne Institute Working Paper Series wp2007n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2007n08
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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2007n08.pdf
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    References listed on IDEAS

    as
    1. Mark B. Stewart, 2004. "The Impact of the Introduction of the U.K. Minimum Wage on the Employment Probabilities of Low-Wage Workers," Journal of the European Economic Association, MIT Press, vol. 2(1), pages 67-97, March.
    2. Drago, Robert & Black, David & Wooden, Mark, 2004. "Female Breadwinner Families: Their Existence, Persistence and Sources," IZA Discussion Papers 1308, Institute of Labor Economics (IZA).
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    Cited by:

    1. Robson, Doug & Rodgers, Joan R, 2008. "Travail to No Avail? Working Poverty in Australia," Economics Working Papers wp08-08, School of Economics, University of Wollongong, NSW, Australia.

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