The Harvester Judgment/ Living wage ruling.

[DBT]

A bit of History relating to the setting of a minimum wage in Australia:

The Harvester judgement and Australia’s minimum wage

''In 1907, an arbitration court judge decided that wages at a Melbourne factory should be based on the cost of living for a worker and his family. From then on, Australia’s minimum wage was based on what was fair and reasonable rather than what the employer was offering.

The decision was made in the Commonwealth Court of Conciliation and Arbitration, just a few years after Federation in 1901 as the laws of the new nation were being developed.''

Out of hundreds of business operating in Melbourne, Justice Higgins chose to focus on the Sunshine Harvester Company because it was a large employer with a great number and variety of employees.

The Sunshine Harvester Company was owned by H. V. McKay, a successful employer, innovator and community leader producing the high-tech machine of the age – the combine harvester.

Employees at Sunshine Harvester were represented by many trade unions, including the Agricultural Implement Makers’ Society, the Amalgamated Iron-Moulders , the Timber Smiths and Iron-Workers’ Society , the Coach Builders and Wheelwrights’ Society, and the Certificated Engine-Drivers.

In 1907, the Harvester Judgement set a minimum wage for unskilled labourers of 2 pounds, 2 shillings per week the amount an average worker paid for food, shelter and clothing – for him and his family.''

 

[laughing dog]

Does the current Australian minimum wage meet the standard set in 1907?

 

[Gun Nut]

2 pounds, 2 shillings per week the amount an average worker paid for food, shelter and clothing – for him and his family.''

[/B]

Seems reasonable on the surface... how large a family? If your family is larger than that, do you get more... or less if fewer members?

Could part of the problem in the US be related to family size and this idiotic "right to reproduce boundlessly"?

If I choose to shop exclusively at whole foods, and have 11 children, then MY minimum wage will need to be upwards of $100 / hour for food and child support alone.

I am of the opinion that the idea of a "living wage" is good... but should apply to the INDIVIDUAL living, not supporting any number of people that share your last name.

If your argument is "well don;t shop at whole foods, get a happy meal".... then my response is, "maybe you can't afford to have children at all"

 

[SimpleDon]

2 pounds, 2 shillings per week the amount an average worker paid for food, shelter and clothing – for him and his family.''

[/B]

Seems reasonable on the surface... how large a family? If your family is larger than that, do you get more... or less if fewer members?

Could part of the problem in the US be related to family size and this idiotic "right to reproduce boundlessly"?

If I choose to shop exclusively at whole foods, and have 11 children, then MY minimum wage will need to be upwards of $100 / hour for food and child support alone.

I am of the opinion that the idea of a "living wage" is good... but should apply to the INDIVIDUAL living, not supporting any number of people that share your last name.

If your argument is "well don;t shop at whole foods, get a happy meal".... then my response is, "maybe you can't afford to have children at all"

We always get this question in any thread on the living wage. Do you not understand the concept of the term "average?"

... Just saying.

 

[Worldtraveller]

2 pounds, 2 shillings per week the amount an average worker paid for food, shelter and clothing – for him and his family.''

[/B]

Seems reasonable on the surface... how large a family? If your family is larger than that, do you get more... or less if fewer members?

Could part of the problem in the US be related to family size and this idiotic "right to reproduce boundlessly"?

If I choose to shop exclusively at whole foods, and have 11 children, then MY minimum wage will need to be upwards of $100 / hour for food and child support alone.

I am of the opinion that the idea of a "living wage" is good... but should apply to the INDIVIDUAL living, not supporting any number of people that share your last name.

If your argument is "well don;t shop at whole foods, get a happy meal".... then my response is, "maybe you can't afford to have children at all"

We always get this question in any thread on the living wage. Do you not understand the concept of the term "average?"

... Just saying.

Add it to the list of things GN doesn't understand....

 

[DBT]

2 pounds, 2 shillings per week the amount an average worker paid for food, shelter and clothing – for him and his family.''

[/B]

Seems reasonable on the surface... how large a family? If your family is larger than that, do you get more... or less if fewer members?

Could part of the problem in the US be related to family size and this idiotic "right to reproduce boundlessly"?

If I choose to shop exclusively at whole foods, and have 11 children, then MY minimum wage will need to be upwards of $100 / hour for food and child support alone.

I am of the opinion that the idea of a "living wage" is good... but should apply to the INDIVIDUAL living, not supporting any number of people that share your last name.

If your argument is "well don;t shop at whole foods, get a happy meal".... then my response is, "maybe you can't afford to have children at all"

It was set at a rate that allowed a worker to support a wife and two children in a modest home. A single person may be saving for marriage, buying a house, etc, so cannot be discriminated against.

The current minimum rate is around $19.49 PH, which in terms of current purchasing power does not allow a worker to buy a house and support a wife and children, not without a second income.

So the original idea of a living wage has, in terms of purchasing power, significantly eroded in value.

 

[Loren Pechtel]

It was set at a rate that allowed a worker to support a wife and two children in a modest home. A single person may be saving for marriage, buying a house, etc, so cannot be discriminated against.

The current minimum rate is around $19.49 PH, which in terms of current purchasing power does not allow a worker to buy a house and support a wife and children, not without a second income.

So the original idea of a living wage has, in terms of purchasing power, significantly eroded in value.

But back then the wife pretty much needed to put her time in keeping house. Now that's nowhere near as necessary, figuring a two-earner couple is reasonable.

 

[DBT]

It was set at a rate that allowed a worker to support a wife and two children in a modest home. A single person may be saving for marriage, buying a house, etc, so cannot be discriminated against.

The current minimum rate is around $19.49 PH, which in terms of current purchasing power does not allow a worker to buy a house and support a wife and children, not without a second income.

So the original idea of a living wage has, in terms of purchasing power, significantly eroded in value.

But back then the wife pretty much needed to put her time in keeping house. Now that's nowhere near as necessary, figuring a two-earner couple is reasonable.

Whether a wife needed to be at home or not isn't pertinent to the idea of earning enough to support a family on a single wage. Your partner may get sick, bills to pay, etc, yet despite working full time your income is not sufficent to meet your needs. Which is why a living wage was proposed and implemented in the first place, but sadly, allowed to erode.

 

[Bomb#20]

It was set at a rate that allowed a worker to support a wife and two children in a modest home.

Three children, actually.

A single person may be saving for marriage, buying a house, etc, so cannot be discriminated against.

The current minimum rate is around $19.49 PH, which in terms of current purchasing power does not allow a worker to buy a house and support a wife and children, not without a second income.

So the original idea of a living wage has, in terms of purchasing power, significantly eroded in value.

Sufficient for "a human being in a civilised community" to support a wife and three children in "frugal comfort" means buying a house? In 1907 didn't any human beings in civilized Victoria communities rent?

But back then the wife pretty much needed to put her time in keeping house. Now that's nowhere near as necessary, figuring a two-earner couple is reasonable.

Whether a wife needed to be at home or not isn't pertinent to the idea of earning enough to support a family on a single wage. Your partner may get sick, bills to pay, etc, yet despite working full time your income is not sufficent to meet your needs. Which is why a living wage was proposed and implemented in the first place, but sadly, allowed to erode.

Funny story about that. A few years later that very same Justice Higgins ruled that a fair and reasonable minimum wage for women was 75% of the minimum wage for men.

 

[Gun Nut]

2 pounds, 2 shillings per week the amount an average worker paid for food, shelter and clothing – for him and his family.''

[/B]

Seems reasonable on the surface... how large a family? If your family is larger than that, do you get more... or less if fewer members?

Could part of the problem in the US be related to family size and this idiotic "right to reproduce boundlessly"?

If I choose to shop exclusively at whole foods, and have 11 children, then MY minimum wage will need to be upwards of $100 / hour for food and child support alone.

I am of the opinion that the idea of a "living wage" is good... but should apply to the INDIVIDUAL living, not supporting any number of people that share your last name.

If your argument is "well don;t shop at whole foods, get a happy meal".... then my response is, "maybe you can't afford to have children at all"

We always get this question in any thread on the living wage. Do you not understand the concept of the term "average?"

... Just saying.

So the living wage is a guarantee only for "average" people to get by. Gotcha. To mirror your sarcasm back at you, you do realize that exactly half the population is below average, right? That's like how math works and all... so that policy provides too little for one half of the population, and too much for the other half. Sounds like the worst possible solution... It fails to properly support almost everyone.

 

[Gun Nut]

We always get this question in any thread on the living wage. Do you not understand the concept of the term "average?"

... Just saying.

Add it to the list of things GN doesn't understand....

GN's List of Incomprehensible Things:

The French
Spectator Sports
Lack of Public Mental Illness Treatment Services
How AI is not just "Random Trial and Error Memorized"
Orange Vegetables
Veganism
How "Average" accurately represents anyone's interests

 

[DBT]

Three children, actually.

Yes. A memory glitch.

Sufficient for "a human being in a civilised community" to support a wife and three children in "frugal comfort" means buying a house? In 1907 didn't any human beings in civilized Victoria communities rent?

Perhaps some workers were not being paid enough? Therefore the need for setting a reasonable minimum pay rate?


A bit of history on home ownership in Australia;

New South Wales' first Governor, Arthur Phillip, somewhat naively assumed the British government would own all the land in his newfound colony.

"But what happens very quickly is that people take land without permission," Graeme Davison, professor of urban studies at Monash University, says.

It wasn't all anarchy: freed convicts were granted land in the hope they wouldn't return to England, and retiring officers were gifted land, as were free settlers.

And by the time Governor Ralph Darling arrived in 1825, a more orderly system was implemented.

"From about that point on you begin to get a more systematic freehold land system," Professor Davison says.

"By the 1830s, owning your own piece of property was an attainable objective."


In English cities, land tenure laws and vast church-owned estates precluded many from ever owning their own plot. This was not the case in Sydney and Melbourne.

Melbourne in particular experienced quite rapid subdivision in the 1850s which, combined with the gold rush, lead to the establishment of shanty-towns.

"You get quite high rates of home ownership in relatively poor parts of Melbourne from quite an early age," Professor Davison says.

Funny story about that. A few years later that very same Justice Higgins ruled that a fair and reasonable minimum wage for women was 75% of the minimum wage for men.

Nobody is claiming a history of perfect judgements, or social or economic justice. Far from it.

 

[bilby]

Does the current Australian minimum wage meet the standard set in 1907?

The current minimum wage in Australia is $740.80 per week, which equates to a minimum hourly rate of $19.49. This minimum wage was set on May 30, 2019.

Whether that rate meets the 1907 standard is hard to say - it depends on a huge number of factors, including (but not limited to) standards of living, costs of living, family size, and inflation rates.

The RBA pre-decimal inflation calculator tells me that £2/2/- in 1907 is equivalent to $315.27 in 2018; However the cost of housing (including rental housing) in particular has inflated far more rapidly than consumer prices in general, so whether $740.80 is 'similar' will vary wildly, depending on both location and style of accommodation. A labourer living in the slums at 'The Rocks' in Sydney in 1907 would have a coronary if he found out what the real estate there is worth today. But he would be mightily impressed by the fact that these days houses for labourers have running water, electricity, a telephone, and a flushing toilet. And he wouldn't know what to make of broadband Internet, a refrigerator, or air conditioning.

The average number of children has fallen; And other government benefits are available to parents who earn minimum wage. But the cost of children has increased dramatically too - in 1907 kids weren't expected to have a laptop or tablet for school. And nor were they dependants for so long - fourteen year olds in 1907 were expected to leave school and get a job (the school leaving age in Queensland was raised from 12 to 14 that year; it varied from state to state at the time).

Clothing was a very different matter in 1907 too - but in the opposite direction. A far larger fraction of household income went on clothes in 1907 than it does today. Artificial fibres are typically cheaper and more hard-wearing than the materials available in 1907.

Suffice to say that minimum wage continues to be set by a commission whose terms of reference haven't changed too dramatically since 1907, and who decided that $740.80 is the appropriate weekly rate in 2019.

 

[Bomb#20]

Sufficient for "a human being in a civilised community" to support a wife and three children in "frugal comfort" means buying a house? In 1907 didn't any human beings in civilized Victoria communities rent?

Perhaps some workers were not being paid enough? Therefore the need for setting a reasonable minimum pay rate?

No doubt some workers were not being paid enough. How does that support the contention that it's unfair or unreasonable for your employer not to buy you a house!?! That's a ludicrous standard. What the heck is wrong with renting? Being a renter does not mean you're suffering privation.

Moreover, what evidence is there that the original 42 shillings a week was calculated based on what a worker would need to cover a mortgage rather than on what he'd need to cover rent?

... It wasn't all anarchy: freed convicts were granted land in the hope they wouldn't return to England, and retiring officers were gifted land, as were free settlers. ... Melbourne in particular experienced quite rapid subdivision in the 1850s which, combined with the gold rush, lead to the establishment of shanty-towns. "You get quite high rates of home ownership in relatively poor parts of Melbourne from quite an early age," Professor Davison says.

Well, it's easier for the government to give out free land when the country is still sparsely populated, not to mention when they can still get away with just driving off the previous owners by force. And it's easier to build a house on your free land when there are no quality standards and you can just put up a shanty.

Funny story about that. A few years later that very same Justice Higgins ruled that a fair and reasonable minimum wage for women was 75% of the minimum wage for men.

Nobody is claiming a history of perfect judgements, or social or economic justice. Far from it.

That isn't the point. The point is that "Your partner may get sick, etc." was just as true in 1907 as now. The income of the wife is very pertinent. It has to be taken into account in judging whether the minimum wage "in terms of purchasing power, significantly eroded in value." When you call $19.49/hour "eroded" from 7 shillings a day, you're overestimating the 1907 minimum wage by looking only at the men's wage, and you're discounting the much greater unpaid labor women tended to put in in the days before washing machines etc.. Plus, you're taking for granted that the standard for civilized shelter is a house you own rather than a flat you rent; you're neglecting the overall improvement in housing quality; and you're treating an unskilled worker having a third kid he can't afford as something employers should subsidize, in a world overwhelmed by carbon dioxide due to people having more than two kids.

And on top of all that, "your partner may get sick". As may you. In 1907, that would have to be paid for out of your same 7 shillings a week. Now you have Medicare. Government health care spending needs to be added in to that $19.49/hour if you want an apples-to-apples comparison.

So I'm not persuaded that a modern minimum wage earner is really living worse than her counterpart in 1907.

 

[bilby]

I would point out that most of the less expensive housing in Australian capital cities costs more to rent than to buy - that is, the monthly mortgage payments on a typical loan are lower than the rent would be for the same property, even immediately at the time of purchase (and of course the gap then grows as rents rise with inflation, but mortgage payments only rise with interest rates - and of course they also fall with interest rates).

This poverty trap is caused by the high down-payment which presents an insuperable barrier to obtaining a loan for poor people.

Sydney is notorious for this, but it also applies to a lesser degree to Melbourne and Brisbane.

Certainly it's not obvious that a wage sufficient to buy a home is necessarily sufficient to rent one; And it's likely for many workers that a higher income is needed to cover rent than would be necessary to cover the cost of buying (assuming access to a lump sum that covers the down payment).

The Australian housing market (including our home loan market) looks VERY different from the American market. (I wish I could get a fixed mortgage rate locked in for thirty years, but sadly five is the absolute maximum).

 

[Metaphor]

I would point out that most of the less expensive housing in Australian capital cities costs more to rent than to buy)

That depends, surely. First of all, I have a lot of trouble imagining there is any 'less expensive' housing in Sydney. There's expensive housing, super-expensive housing, and "if you're New York City rich, you may as well live in New York City" housing.

- that is, the monthly mortgage payments on a typical loan are lower than the rent would be for the same property, even immediately at the time of purchase (and of course the gap then grows as rents rise with inflation, but mortgage payments only rise with interest rates - and of course they also fall with interest rates).

That is a function of what kind of mortgage term you take out, but in Sydney the median house price is over AUD$1m. For a thirty year mortgage, at current (record low) interest rates, borrowing $800,000 and having $200,000 as deposit, that's about AUD$3,500/month. The median house rent in Sydney is AUD$530/week or about AUD$2,300 a month. Even assuming 'buying stock' is better than 'rental stock' (so let's assume that the houses people rent would be above median if it were sold), it's hard to see how you mortgage payments are going to be lower anywhere in Sydney, including the scummy areas where houses go for a mere $700,000.

This poverty trap is caused by the high down-payment which presents an insuperable barrier to obtaining a loan for poor people.

I think the problem is that the down payment is high because house prices are fucking ludicrous.

In the ACT, in 1980, they typical house cost about $48,000. Typical salary was about $20,000 per annum.

If people could buy a three-bedroom house today for 2.5 times the median wage, there'd be no housing crisis whatsoever.

Certainly it's not obvious that a wage sufficient to buy a home is necessarily sufficient to rent one; And it's likely for many workers that a higher income is needed to cover rent than would be necessary to cover the cost of buying (assuming access to a lump sum that covers the down payment).

The gross rental yield on properties has been going down and down. Not particularly because rents are cheaper, but the underlying cost of housing stock has become absurd. I would say renting is only a more 'expensive' option in outer regional areas where gross rental yields are closer to what they were historically.

The Australian housing market (including our home loan market) looks VERY different from the American market. (I wish I could get a fixed mortgage rate locked in for thirty years, but sadly five is the absolute maximum).

I'd take the '18%' interest rates (that homeowners had for a few months in the early 1990s) if I could buy a three bedroom house for 2.5x my salary.

 

[bilby]

That depends, surely. First of all, I have a lot of trouble imagining there is any 'less expensive' housing in Sydney. There's expensive housing, super-expensive housing, and "if you're New York City rich, you may as well live in New York City" housing.



That is a function of what kind of mortgage term you take out, but in Sydney the median house price is over AUD$1m. For a thirty year mortgage, at current (record low) interest rates, borrowing $800,000 and having $200,000 as deposit, that's about AUD$3,500/month. The median house rent in Sydney is AUD$530/week or about AUD$2,300 a month. Even assuming 'buying stock' is better than 'rental stock' (so let's assume that the houses people rent would be above median if it were sold), it's hard to see how you mortgage payments are going to be lower anywhere in Sydney, including the scummy areas where houses go for a mere $700,000.

This poverty trap is caused by the high down-payment which presents an insuperable barrier to obtaining a loan for poor people.

I think the problem is that the down payment is high because house prices are fucking ludicrous.

In the ACT, in 1980, they typical house cost about $48,000. Typical salary was about $20,000 per annum.

If people could buy a three-bedroom house today for 2.5 times the median wage, there'd be no housing crisis whatsoever.

Certainly it's not obvious that a wage sufficient to buy a home is necessarily sufficient to rent one; And it's likely for many workers that a higher income is needed to cover rent than would be necessary to cover the cost of buying (assuming access to a lump sum that covers the down payment).

The gross rental yield on properties has been going down and down. Not particularly because rents are cheaper, but the underlying cost of housing stock has become absurd. I would say renting is only a more 'expensive' option in outer regional areas where gross rental yields are closer to what they were historically.

The Australian housing market (including our home loan market) looks VERY different from the American market. (I wish I could get a fixed mortgage rate locked in for thirty years, but sadly five is the absolute maximum).

I'd take the '18%' interest rates (that homeowners had for a few months in the early 1990s) if I could buy a three bedroom house for 2.5x my salary.

I am talking about the less expensive stock. Though I am happy to accept that this doesn't exist anymore in Greater Sydney, which has prices that are batshit crazy.

Where I am, Logan City, my mortgage payments per month when interest rates were pushing 7% were still less than the rent paid by my neighbours for very similar properties.

And I am prepared to bet that we have a much greater proportion of minimum wage earners in Logan than there are in Greater Sydney. (Although there's also plenty of benos who earn bugger all too).

I certainly concur regarding houses for as little as a few years of income.

 

[DBT]

No doubt some workers were not being paid enough. How does that support the contention that it's unfair or unreasonable for your employer not to buy you a house!?! That's a ludicrous standard. What the heck is wrong with renting? Being a renter does not mean you're suffering privation.

It's not about your employer buying you a house, but a wage set to a standard that allows the average worker to live in dignity, to buy a house if that is the desire, to support a family in relative comfort....

Moreover, what evidence is there that the original 42 shillings a week was calculated based on what a worker would need to cover a mortgage rather than on what he'd need to cover rent?

Makes no difference. If a worker decided to rent, that is the business of that individual. The Harvester judgement used their example as a benchmark, not an edict.

Besides, for security of tenure and stability for the children, it is better for a family to own their own home than rent.

That isn't the point. The point is that "Your partner may get sick, etc." was just as true in 1907 as now. The income of the wife is very pertinent. It has to be taken into account in judging whether the minimum wage "in terms of purchasing power, significantly eroded in value." When you call $19.49/hour "eroded" from 7 shillings a day, you're overestimating the 1907 minimum wage by looking only at the men's wage, and you're discounting the much greater unpaid labor women tended to put in in the days before washing machines etc.. Plus, you're taking for granted that the standard for civilized shelter is a house you own rather than a flat you rent; you're neglecting the overall improvement in housing quality; and you're treating an unskilled worker having a third kid he can't afford as something employers should subsidize, in a world overwhelmed by carbon dioxide due to people having more than two kids.

And on top of all that, "your partner may get sick". As may you. In 1907, that would have to be paid for out of your same 7 shillings a week. Now you have Medicare. Government health care spending needs to be added in to that $19.49/hour if you want an apples-to-apples comparison.

So I'm not persuaded that a modern minimum wage earner is really living worse than her counterpart in 1907.

Sure its true that the income of the wife is pertinent. but in those days it was far more common for the wife to stay at home and take care of the children, run the household, etc, than it is now because a second income is far more necessary now than it was after the ruling - that a worker can earn enough to buy or rent a house and keep his family in relative comfort;

Quote;
''Higgins also had regard to historical trends in wage levels and sought to restore the real value of wages that had prevailed in more prosperous times.To the extent that Higgins ruling was passed on to other low paid workers in the small factories and other business being established in the new nation this represented a wage increase of nearly 20 %. Substantial but badly needed after two decades of wage cuts and worker repression that followed the depression of the 1890s. In fact conditions not dissimilar to what working women and men have endured recently in modern Australia.''


''Today Australia needs to return to the basic principles that underpinned what become known as the Harvester Judgment.The Fair Work Commission is required by law to consider a variety of factors when adjusting the minimum wage.4These factors do include considerations about the needs of low paid workers as well as the ability of employers to absorb cost increases and the state of the economy. In practice however, the ACTU is of the opinion, that often the emphasis placed on the needs of low paid workers for an acceptable standard of living in modern day Australia is inadequate when compared with the emphasis placed on other economic considerations.As a result in 2017 Australia has far too many workers living in poverty.For these workers our national minimum wage does not afford them a life of “reasonable frugal comfort”. In fact we currently face a cost of living crisis due to soaring prices of essential services and commodities. Due to a combination of wage stagnation at the bottom of the income distribution and soaring gains at the top, income inequality is at a 70 year high. Cuts in penalty rates, the expansion of casual work and temporary jobs and the erosion of job security exacerbate the misery of working life in contemporary Australia.''

 

[Bomb#20]

Does the current Australian minimum wage meet the standard set in 1907?

The current minimum wage in Australia is $740.80 per week, which equates to a minimum hourly rate of $19.49. This minimum wage was set on May 30, 2019.

And that $740.80 is for a 38 hour workweek. In 1907 in Australia the average workweek was 48 hours.

 

[DBT]

Wage increases have been sluggish for decades and stagnant for years in Australia;

''After five years of stagnating incomes — with Australians experiencing record low or near record low wages growth and decades without a wage breakout — it's hard to credit how different things once were, and not so long ago in the sweep of history.''

"The underlying issue is the lack of income growth," Reserve Bank governor Philip Lowe told the House of Representatives Economics Committee last month.

Even the Reserve Bank, once the wages cop looking to curtail pay rises, is advocating for higher pay.

"Many people borrowed, I think, assuming incomes would grow at the old rate and they haven't, they're having more difficulty, they've got less free cash and so they can't spend in a way.