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Employment experts debate prospects for minim -

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Reporter: Jennifer Macey

ELEANOR HALL: The economist, Mark Wooden, is also arguing that any increase to the minimum wage
will trigger more job losses.

In a study for the Melbourne Institute of Applied Economic and Social Research, Dr Wooden finds
that men and women in low paid jobs are more likely to join the unemployment queues than workers in
higher paid jobs, but he says that any job is better than none.

But another employment expert says his argument is unconvincing.

Jennifer Macey has our report.

JENNIFER MACEY: Economist Mark Wooden believes any job - even a low paid job - is better than no
job. The deputy director of the Melbourne Institute of Applied Economic and Social Research has
just released a report looking at low paid workers.

It finds that men who are in low paid jobs are not more likely to join the unemployment queues
compared to men in higher paid work.

MARK WOODEN: Jobs are best protection against economic hardship. Once you lose your job in a
recession the problem is finding another one. If it was in good times you can lose your job and you
can easily find another one.

So if you lose your job now you could be without a job or not have a very good income for the next
two years. Then there's the prospect that that'll continue on. You become the long term unemployed
of the future.

JENNIFER MACEY: Professor Wooden analysed data from the Household, Income and Labour Dynamics in
Australia report which surveyed more than 11,000 people between 2001 and 2007. He says the study
supports his argument against any increase in the minimum wage.

MARK WOODEN: You hear the Government - Mr Rudd, Mr Swan say that jobs is the priority, the concern
I have of course is that priority really isn't jobs, the priority is paying back the debt the
Government has to the ACTU.

I certainly don't think award modernisation, so-called, is going to be good for jobs if it raises
the cost of doing business and certainly with the Fair Pay Commission minimum wage decision coming
very, very soon; I mean if I was the government I would be putting a figure and the figure would be
zero.

JENNIFER MACEY: But Professor Barbara Pocock the director of the Centre for Work and Life at the
University of South Australia disagrees.

BARBARA POCOCK: I think there are going to be jobs shed in the current economic climate regardless
of a modest minimum wage increase. The forces that were affecting demand and the nature of
employment in many sectors are well beyond the impact of a marginal rate of pay increase for the
low paid.

JENNIFER MACEY: She says it's impossible to separate low wages from low levels of skill, education
and experience.

BARBARA POCOCK: Well the two thing are very, very closely correlated. Many low paid workers have
low skills, and it is a key characteristic for explaining them being locked into low pay and in
many cases circulating between low pay and unemployment.

So you can't really take the skills and experience story out of the low paid story; as this piece
of research tries to do.

JENNIFER MACEY: And while low paid men might be protected - it's a different story for women. The
Melbourne Institute's report found that low paid men have a 20 per cent higher chance of becoming
unemployed than high paid men, while low paid women have a 70 per cent chance of losing their jobs
compared to higher paid women.

Professor Barbara Pocock again:

BARBARA POCOCK: Nearly one in two workers in Australia are now women and a disproportionate number
of the low paid are women. So the argument around women is very important.

But this study is not really about what happens for low paid workers if they get a pay increase and
that's the critical argument around the minimum wage.

JENNIFER MACEY: But Professor Mark Wooden says there are other reasons why low paid women leave the
workforce.

MARK WOODEN: Maybe it's because of employers behaving differently; so maybe there's some of
discrimination in hiring and firing going on there. Perhaps another reason is that in many
households women are the secondary income earner, so some of those women end up in low wage jobs
and are not quite so attached to them

JENNIFER MACEY: And he says the ACTU's push to raise the minimum wage by $21 per week in this
current economic climate is insane.

MARK WOODEN: In these particular times I wouldn't be forcing employers to pay more for their
labour. In fact I can see every reason why they definitely should be zero; because of their
disadvantage in the labour market, because of their skills.

JENNIFER MACEY: But Professor Pocock says other says other research has found little evidence that
employers sacked workers when minimum wages increased.

BARBARA POCOCK: We know that every dollar we put into pay packet of low paid worker is highly
likely to be spent, so there's a good stimulus argument for maintaining a decent rate of increase
for the low paid. And beyond the economics of it there are really strong arguments on the equity
side of the equation. Low paid workers are confronting high costs of training, their transport
costs are still high and their rental costs are also high in many Australian cities.

I think there are very strong arguments on the side of justice and a decent way of life for the
more than one in 10 Australian workers who are low paid, to get an increase in their pay packet.

ELEANOR HALL: Professor Barbara Pocock from the University of South Australia, ending that report
by Jennifer Macey.