Minimum wage earners have far higher life satisfaction than the unemployed and they are also just as happy with their lives as medium wage workers, a study from Curtin University's Business School has found.
Given that the minimum wage is $14.31 an hour and the study included many who are earning below, there is an expectation that this would have a significant impact on life satisfaction.
Curtin Business School research associate, Dr Mike Dockery, said the study raised the question of the potential impact of higher minimum wages on employment.
"When asked to rate their life satisfaction, there was little difference between middle income and low wage earners and what is more surprising is that people on the minimum wage were also just as satisfied in their jobs as medium wage workers," he said.
"If no difference in life satisfaction can be identified across such a broad range of the wage spectrum, then the effect of a marginal increase in minimum wages would be trivial in the extreme."
The study, based on an analysis of more than 7,000 people surveyed in the Household, Income and Labour Dynamics in Australia series, also showed that the unemployed were considerably worse off than those on minimum wage.
"It was clear that the unemployed had significantly lower self-assessed health status, worse financial circumstances, less likely to own their own home and almost twice as likely to be in public housing as those workers in minimum wage jobs," Dr Dockery said.
"It seems that any unemployment created by an increase in the minimum wage will be associated with a substantial decline in the wellbeing of those workers affected.
"Conversely, the research indicates that increases in minimum wages will have virtually no effect on wellbeing of those affected which leads to our conclusion that the Australian Fair Pay Commission should be extremely wary of the potential impact of higher minimum wages on employment."
