Book Review

As is well known to students of labour history, Australia was one of the first nations – being hailed as an exemplar – to introduce a ‘national’ minimum wage. In the famous Harvester case of 1907 Mr Justice Higgins determined a basic wage of $4.20 (for a six day working week) to enable a family of five to live in ‘frugal comfort’. Higgins and his contemporaries rejected the nostrums of neo-classical economics, as evidenced by the ‘devastation’ wrought by the depression of the 1890s. In its stead they fashioned a positive role for the state, combining ideas from the Fabian Socialists, Sidney and Beatrice Webb, Catholic Social Thought – particularly the 1891 Papal Encyclical Rerum Novarum – and American Progressivism. The basic wage dominated Australian wage determination from 1907 to 1967. It has been resurrected in the form of what has become an annual living wage case since 1993.	1
The United States of America has also had a long history, or association, with minimum wages. Jerold Waltman’s The Politics of the Minimum Wage provides an insightful account of American experience. A major strength of his work is the way he combines insights across the disciplines – politics, history, law, sociology and economics. His survey of economic writings on the impact of minimum wages probably constitutes the major strength of his work.	2
Waltman examines the crystallization of ideas behind the emergence of the minimum wage in America. In reading this material Australian students will have a sense of déjà vu. The same ideas seem to have ‘been at work’ in both nations; with, the added rider, that Australian experience helped to ‘inspire’ America. This will serve to act as an antidote to crude generalizations concerning globalisation or American hegemony. Waltman also provides historical information on the evolution of the minimum wage, opinion polls, the socio-economic background of recipients, contests within Congress over the 1996 increase from US$4.25 to US$5.15 an hour, and economic analyses of the minimum wages’ impact.	3
Three major aspects of Waltman’s contribution will be highlighted. Waltman maintains that, in more recent times, discussions concerning the minimum wage – by friend and foe – have been conducted from the prism of the individual and the associated moorings of neo-classical economics. He would rather re-orient discussions to notions associated with citizenship; especially such notions which are consistent with communication values inherent in the Progressive Republicanism at the beginning of the twentieth century.	4
In articulating such a case Waltman makes interesting use of public opinion polls, which, over the years, have consistently shown that the ‘general public’ are prepared to pay higher prices and/or higher taxes to enable low income workers to have a better standard of life. Waltman is also interested in these issues because of changes to American welfare. Welfare recipients are increasingly being forced to work, if they are to receive financial aid. Should such persons, Waltman asks, be forced to work for below poverty line incomes? Such issues are beginning to have a resonance in contemporary Australia.	5
Waltman argues that political contests in America over the minimum wage are ‘symbolic’, in the absence of a natural constituency for such a cause. The latter is explained in terms of minimum wage earners being either too young to vote and/ or too poor and disorganized to develop a coalition for campaigns. Low wage earners are also less likely to register for and/or vote in American elections. The ‘symbolism’ of minimum wage contests is explained in terms of different interest groups using this issue, which emerges on an ad hoc basis, to ‘battle’ over the vexed issue of government, or state, intervention. Interest groups on both sides of this divide simply re-hash and rehearse old arguments that they use against each other. Once a campaign for an increase has been resolved they disappear into the twilight, displaying little or no interest concerning the impact of any increase that may, in fact, be granted.	6
This situation can be contrasted with Australia. Unions, especially the Australian Council of Trade Unions – virtually throughout its history – and, more recently (if not before), religious and welfare groups have provided a natural constituency for minimum wage earners. Moreover, in Australia, such campaigns are conducted more regularly, almost annually, before a national industrial tribunal. In America such decisions are made politically, occurring on an unpredictable intermittent basis. In Australia the parties present evidence to the tribunal concerning the impact of its last, or previous, decisions. Waltman estimates that five per cent of American workers are minimum wage earners (p. 69). In Australia, currently more than one in five workers are dependent on living wage cases/increases.	7
Finally, Waltman concludes, after examining recent econometric work, that the traditional economists refrain concerning the negative impact of increasing the minimum wage is not supported by the evidence. The evidence, in fact, provides cautious support for a positive impact. In so doing he heavily draws on the work of David Card and Alan Krueger (Myth and Measurement: the New Economics of the Minimum Wage, Princeton University Press, Princeton, 1995) which has been extensively relied upon in recent living wage cases in Australia.	8
The Politics of the Minimum Wage is highly recommended. Waltman has provided a succinct interdisciplinary account of the minimum wage in America. He shows how Australia’s pioneering developments helped influence early American usage. His account also provides an excellent comparator for considering, or more correctly, reconsidering Australian involvement with the basic, living or minimum wage.	9
University of New South Wales BRAHAM DABSCHECK

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