Wages and inflation. It’s complicated. What might a 5.1 percent increase to the minimum wage have on the Australian economy?

Who are Australia’s minimum wage workers? Source: Source: H Dragon/Creative Commons

Currently the cost of living is increasing rapidly. In its election campaign the Australian Labor Party proposed that employees on the minimum wage should get a 5.1 percent wage rise. The Coalition countered that such a move would cause greater inflation. What about the Greens?

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Riandy Laksono is a PhD candidate in the Arndt Corden Department of Economics at the ANU He explains to Sri Dean that assessing the impact a wage increase will have on the economy is more complicated than was once believed.

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What can be done to help low-paid and under-paid workers in Australia cope with the growing cost of living? Source: Source: Lukas Coch/AAP PHOTOS