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Working but Poor? Low Pay and Poverty in Australia

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  • Tony Eardley

Abstract

The decentralisation of wage bargaining in Australia has led to a widening of the earnings gap. There has been talk of a new phenomenon of ‘working poverty’, where incomes in a significant number of households fall below the poverty line even when family members are in paid employment. This paper examines the growth of working poverty in Australia from the beginning of the 1980s to the mid-1990s. The analysis suggests that the phenomenon of working poverty is real and has been growing. Low pay on an hourly basis does not in itself equal poverty, and the biggest increase in family poverty has been among employees not in low pay. Yet the proportion of low-paid workers who are also in poor families has grown considerably. In the light of these findings the paper discusses the possible impact of policy approaches such as tax credits and higher minimum wages.

Suggested Citation

  • Tony Eardley, 2000. "Working but Poor? Low Pay and Poverty in Australia," The Economic and Labour Relations Review, , vol. 11(2), pages 308-338, December.
    • Handle: RePEc:sae:ecolab:v:11:y:2000:i:2:p:308-338
    DOI: 10.1177/103530460001100210
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    References listed on IDEAS

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    1. Peter Dawkins, 1998. "Solutions to Australian Unemployment: Three Perspectives - Solutions to Unemployment and Avoiding the 'Diabolical Trade-off': A Discussion," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    2. N. Eissa & H. W. Hoynes, "undated". "The Earned Income Tax Credit and the Labor Supply of Married Couples," Institute for Research on Poverty Discussion Papers 1194-99, University of Wisconsin Institute for Research on Poverty.
    3. Scholz, John Karl, 1996. "In-Work Benefits in the United States: The Earned Income Tax Credit," Economic Journal, Royal Economic Society, vol. 106(434), pages 156-169, January.
    4. Peter Saunders, 1998. "Defining Poverty and Identifying the Poor: Reflections on the Australian Experience," Discussion Papers 0084, University of New South Wales, Social Policy Research Centre.
    5. Inge O'Connor & Timothy Smeeding, 1993. "Working But Poor A Cross-National Comparison of Earnings Adequacy," LIS Working papers 94, LIS Cross-National Data Center in Luxembourg.
    6. Browning, Edgar K., 1995. "Effects of the Earned Income Tax Credit on Income and Welfare," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(1), pages 23-43, March.
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    Cited by:

    1. Jill Wright & Ma. Rebecca Valenzuela & Duangkamon Chotikapanich, 2011. "Measuring Poverty and Inequality from Highly Aggregated Small Area Data: The Changing Fortunes of Latrobe Valley Households," Monash Econometrics and Business Statistics Working Papers 4/12, Monash University, Department of Econometrics and Business Statistics.
    2. 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.
    3. Scott Burrows, 2013. "Precarious work, neo-liberalism and young people’s experiences of employment in the Illawarra region," The Economic and Labour Relations Review, , vol. 24(3), pages 380-396, September.
    4. Inga Laß & Mark Wooden, 2020. "Temporary Employment Contracts and Household Income," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(1), pages 111-132, January.
    5. Joan Rodgers & Douglas Robson, 2008. "Travail to No Avail? Working Poverty in Australia Since 2000," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 11(1), pages 7-25.

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