Hostname: page-component-cc8bf7c57-fxdwj Total loading time: 0 Render date: 2024-12-09T12:53:41.841Z Has data issue: false hasContentIssue false

The Impact of the 1896 Factory and Shops Act on the Labor Market of Victoria, Australia

Published online by Cambridge University Press:  07 September 2018

Andrew J. Seltzer
Affiliation:
Professor, Department of Economics, Royal Holloway, University of London, Egham TW20 0EX, United Kingdom. E-mail: a.seltzer@rhul.ac.uk
Jeff Borland
Affiliation:
Professor, Department of Economics, University of Melbourne, Victoria 2010, Australia. E-mail: jib@unimelb.edu.au

Abstract

This article examines the effects of the Victorian Factory and Shops Act, the first minimum wage law in Australia. The Act differed from modern minimum wage laws in that it established Special Boards, which set trade-specific minimum wage schedules. We use trade-level data on average wages and employment by gender and age to examine the effects of minimum wages. Although the minimum wages were binding, we find that the effects on employment were modest, at best. We speculate that this was because the Special Boards, which were comprised of industry insiders, closely matched the labor market for their trades.

Type
Article
Copyright
© 2018 The Economic History Association. All rights reserved. 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We wish to thank Steph Brophy for research assistance and André Sammartino for drawing our attention to the data used in this paper. Andrew Seltzer wishes to acknowledge funding from the Economic History Society’s Carnevali Small Research Grants Scheme. We have also benefitted from comments by the editor; two anonymous referees; and participants at seminars at the London School of Economics, Royal Holloway College, and University of Melbourne and at the Australia/New Zealand Economic History Society Conference in Canberra, the Economic History Society Conference in Telford, and the World Economic History Congress in Kyoto.

References

Allegretto, Sylvia A., Dube, Arindrajit, and Reich, Michael. “Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data.” Industrial Relations 50, no. 2 (2011): 205240.Google Scholar
Allen, Robert C. “Real Incomes in the English-Speaking World, 1879–1913.” In Labour Market Evolution: The Economic History of Market Integration, Wage Flexibility and the Employment Relation, edited by George Grantham and Mary MacKinnon, 107138. London: Routledge, 1994.Google Scholar
The Age, “The Boot Trade and the Factories Act,” 9 February 1898.Google Scholar
The Argus, “The Boot Trade,” 8 February 1898.Google Scholar
Ashenfelter, Orley, and Smith, Robert S.. “Compliance with the Minimum Wage Law.” Journal of Political Economy 87, no. 2 (1979): 333350.Google Scholar
Australia. Commonwealth Arbitration Reports. Canberra: Australian Government Publication Service, 1907.Google Scholar
Baskaya, Yusuf Soner, and Rubinstein, Yona. “Using Federal Minimum Wages to Identify the Impact of Minimum Wages on Employment and Earnings across the US States.” Unpublished Manuscript.Google Scholar
Bhaskar, V., and To, Ted. “Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition.” Economic Journal 109, no. 455 (1999): 190203.Google Scholar
Bhaskar, V., Manning, Alan, and To, Ted. “Oligopsony and Monopsonistic Competition in Labor Markets.” Journal of Economic Perspectives 16, no. 2 (2002): 155174.Google Scholar
Brandeis, Louis D. “The Constitution and the Minimum Wage: Defense of the Oregon Minimum Wage Law Before the United States Supreme Court.” The Survey (1915): 490494, 521–24.Google Scholar
Brown, Charles. “Minimum Wages, Employment, and the Distribution of Income.” In Handbook of Labor Economics, edited by Orley Ashenfelter and David Card, 21012163. Amsterdam, New York, and Oxford: Elsevier Science, 1999.Google Scholar
Brown, Charles, Gilroy, Curtis, and Kohen, Andrew. “The Effect of the Minimum Wage on Employment and Unemployment.” Journal of Economic Literature 20, no. 2 (1982): 487528.Google Scholar
Card, David, and Krueger, Alan B.. “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania.” American Economic Review 84, no. 4 (1994): 772793.Google Scholar
Card, David, and Krueger, Alan B.. Myth and Measurement: The New Economics of the Minimum Wage. Princeton: Princeton University Press, 1997.Google Scholar
Coghlan, T. A. Labour and Industry in Australia from the First Settlement in 1788 to the Establishment of the Commonwealth in 1901. Melbourne: Cambridge University Press, 1918.Google Scholar
Connolly, Sara, and Gregory, Mary. “The National Minimum Wage and Hours of Work: Implications for Low Paid Women.” Oxford Bulletin of Economics and Statistics 64, no. s1 (2002): 607631.Google Scholar
Dickens, Richard, Machin, Stephen, and Manning, Alan. “The Effects of Minimum Wages on Employment: Theory and Evidence from Britain.” Journal of Labor Economics 17, no. 1 (1999): 122.Google Scholar
Dube, Arindrajit, Lester, T. William, and Reich, Michael. “Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties.” Review of Economics and Statistics 92, no. 4 (2010): 945964.Google Scholar
Ehrenberg, Ronald G., and Smith, Richard S.. Modern Labor Economics: Theory and Public Policy, 11th edition. Boston: Prentice Hall, 2012.Google Scholar
Hagan, J. “Trade Unions and the First Victorian Factory Acts.” Labour History 7, no. 1 (1964): 311.Google Scholar
Hammond, M. B. “Judicial Interpretation of the Minimum Wage in Australia.” American Economic Review 3, no. 2 (1913): 259286.Google Scholar
Hammond, M. B. “Where Life Is More Than Meat: The Australian Experience with Wage Boards.” The Survey (1915a): 495502.Google Scholar
Hammond, M. B. “Wages Boards in Australia: IV. Social and Economic Results of Wages Boards.” Quarterly Journal of Economics 29, no. 3 (1915b): 563630.Google Scholar
Hancock, Keith. The Arbitration Tribunals and the Labour Market. Melbourne: CEDA, 1983.Google Scholar
Hatton, Tim, and Withers, Glenn. “The Labour Market.” In The Cambridge Economic History of Australia, edited by Simon Ville and Glenn Withers, 351372. Melbourne: Cambridge University Press, 2015.Google Scholar
Holcombe, A. N. “The British Minimum Wages Act of 1909.” Quarterly Journal of Economics 24, 3 (1910): 574577.Google Scholar
Huberman, Michael, and Meissner, Christopher M.. “Riding the Wave of Trade: The Rise of Labor Regulation in the Golden Age of Globalization.” Journal of Economic History 70, no. 3 (2010): 657685.Google Scholar
Isaac, Joe. “The Economic Consequences of Harvester.” Australian Economic History Review 48, no. 3 (2008): 280300.Google Scholar
Kennan, John. “The Elusive Effects of Minimum Wages.” Journal of Economic Literature 33, no. 4 (1995): 19501965.Google Scholar
Lester, Richard A. “Employment Effects of Minimum Wages.” Industrial and Labor Relations Review 13, no. 2 (1960): 254264.Google Scholar
Lloyd, Peter. “Customs Union and Fiscal Union in Australia at Federation.” Economic Record 91, no. 293 (2015): 155171.Google Scholar
McCarthy, P. G. “Victorian Wages Boards: Their Origins and the Doctrine of the Living Wage.” Journal of Industrial Relations 10, no. 2 (1968): 116134.Google Scholar
Machin, Stephen, and Manning, Alan. “Minimum Wages, Wage Dispersion and Employment: Evidence from the UK Wages Councils.” Industrial and Labor Relations Review 47, no. 2 (1994): 319329.Google Scholar
McLean, Ian, and Woodland, Stephen. “Consumer Prices in Australia 1850–1914.” Working Paper 92-4, Department of Economics, University of Adelaide, 1992.Google Scholar
Merrett, David T. “The Australian Bank Crashes of the 1890s Revisited.” Discussion Paper 2013-05, Centre for Economic History, Australian National University, 2013.Google Scholar
Mulvey, Charles. “Overview of the Debate.” In Alternatives to Arbitration, edited by Richard Blandy and John Niland, 1128. Sydney: Allen and Unwin, 1986.Google Scholar
Neumark, David, and Wascher, William. “Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws.” Industrial & Labor Relations Review 46, no. 1 (1992): 5581.Google Scholar
Neumark, David, and Wascher, William. Minimum Wages. Boston: MIT Press, 2008.Google Scholar
Neumark, David, Salas, J. M. Ian, and Wascher, William. “More on Recent Evidence on the Effects of Minimum Wages in the United States.” IZA Journal of Labor Policy 3, no. 24 (2014a). http://www.economics.uci.edu/~dneumark/IZA%20JLP.pdf.Google Scholar
Neumark, David, Salas, J. M. Ian, and Wascher, William. “Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby With the Bathwater?” Industrial and Labor Relations Review 67, no. 3 (2014b): 608648.Google Scholar
Norris, Keith. “The Wages Structure: Does Arbitration Make Any Difference?” In Wage Fixation in Australia, edited by John Niland, 183202. Sydney: Allen and Unwin, 1986.Google Scholar
OECD. “Minimum Relative to Average Wages of Full-Time Workers.” https://stats.oecd.org/Index.aspx?DataSetCode=MIN2AVE (accessed 24/07/2015).Google Scholar
Rankin, Mary Theresa. Arbitration and Conciliation in Australasia: The Legal Wage in Victoria and New Zealand. London: Allen and Unwin, 1916.Google Scholar
Reeves, William Pember. State Experiments in Australia & New Zealand. London: Allen and Unwin, 1923.Google Scholar
Seltzer, Andrew J. “The Effects of the Fair Labor Standards Act of 1938 on the Southern Seamless Hosiery and Lumber Industries.” Journal of Economic History 57, no. 2 (1997): 396415.Google Scholar
Seltzer, Andrew J.. “Labour, Skills, and Migration.” In The Cambridge Economic History of Australia, edited by Simon Ville and Glenn Withers, 178201. Melbourne: Cambridge University Press, 2015.Google Scholar
Seltzer, Andrew J., and Borland, Jeff. “The Impact of the 1896 Factory and Shops Act on the Labor Market of Victoria, Australia [Data set].” Ann Arbor, MI: Interuniversity Consortium of Political and Social Research, 2018. Available at https://www.openicpsr.org/openicpsr/project/103000/version/V1/view/.Google Scholar
Sinclair, W.A. The Process of Economic Development in Australia. Melbourne: Cheshire Publishing, 1976.Google Scholar
Sinclair, W.A. “Annual Estimates of Gross Domestic Product: Australian Colonies/States 1861–1976/77.” 2009. http://arrow.monash.edu.au/vital/access/manager/Repository/monash:14149 (accessed 22/5/2017).Google Scholar
Stewart, Mark B., and Swaffield, Joanna K.. “The Other Margin: Do Minimum Wages Cause Working Hours Adjustments for Low-Wage Workers?” Economica 75, no. 297 (2008): 148167.Google Scholar
Stigler, George. “The Economics of Minimum Wage Legislation.” American Economic Review 36, no. 3 (1946): 358365.Google Scholar
Vamplew, Wray. Australians, Historical Statistics. Sydney: Fairfax, Syme and Weldon Associates, 1987.Google Scholar
Victoria. Papers of Special Boards. Victoria Public Record Office, North Melbourne, VPRS 5466, 18961913.Google Scholar
Victoria. Victorian Year Book, 1894–1913. http://www.abs.gov.au/AUSSTATS (accessed 22/5/2017).Google Scholar
Victoria. Report of the Chief Inspector of Factories, Work-Rooms, and Shops. Melbourne, Government Printer, 1894–1914.Google Scholar
Webb, Sidney. “The Economic Theory of a Legal Minimum Wage.” Journal of Political Economy 20, no. 10 (1912): 973998.Google Scholar
Withers, Glenn. “Australian Wages and Labour Market Adjustment: A Comparative International Assessment.” In Wage Fixation in Australia, edited by John Niland, 243255. Sydney: Allen and Unwin, 1986.Google Scholar
Zavodny, Madeline. “The Effect of the Minimum Wage on Employment and Hours.” Labour Economics 7, no. 6 (2000): 729750.Google Scholar
Supplementary material: File

Seltzer and Borland supplementary material

Online Appendix

Download Seltzer and Borland supplementary material(File)
File 84.2 KB