The Wage of the Unskilled Worker and Family Needs, 1907 and 1920

By Keith Hancock

The Harvester case of 1907 was a seminal event in Australian industrial history. The translation of its principles into the federal and much of the state award structure led, for 60 years, to the bifurcated system of wage prescription, wherein the wage of the least skilled worker was a platform upon which the additional amounts paid to other workers were superimposed. Practices and policies affecting the basic wage constituted a major component of the distinctively Australian system of wage fixation. Yet Harvester was a flawed start to Commonwealth wage policy. Its principal defect was the encouragement that it gave to a perception that the basic wage provided for the needs of a family.

Thirteen years later, the adequacy of the basic wage was reviewed by a Royal Commission that inquired in depth into needs and reported that the necessary amount for a family of five greatly exceeded   the 1920 equivalent of the Harvester minimum. But although the difference between the two standards is of interest and importance, we should not lose sight of a further factor that had a large impact on the real basic wage (and was one of the reasons for the Royal Commission's appointment): a misalignment of the movements of the wage with those of retail prices.

This paper, then, is about three topics: the basis of the so-called Harvester standard; the Royal Commission's endeavour to establish a more sophisticated standard; and the effects on the real basic wage of the Arbitration Court's techniques of wage adjustment.

Click here to download this paper (Requires Acrobat Reader)