THE shortfall of wages for typical workers on Australian Workplace Agreements (AWAs) is much larger than previously realised, according to new research.

The study, by Griffith University Professor David Peetz and Curtin University Professor Alison Preston, examined previously unpublished earnings data from the Australian Bureau of Statistics.

The study found the typical (median) non-managerial employee on an AWA was receiving 16.3 per cent less per hour than their equivalent on a registered collective agreement.  For typical women on AWAs, the shortfall was even greater at 18.7 per cent. Peetz says the gap has been underestimated on two fronts.

"The published figures on registered individual contracts included agreements in the state systems - and they pay nearly twice what AWAs pay," he says.

"The published averages are also distorted by the wages earned by a small number of high-income occupations - like miners - with almost 70 per cent of AWA workers earning less than average AWA earnings. The median is a much truer indication of the position of the typical employee."

Peetz says the research explored whether AWAs produced general benefits in terms of flexibility and higher wages, or whether they were used for cutting labour costs and avoiding unions.

"The study found the biggest shortfall for AWA workers is in small organisations, where cutting labour costs is likely to be important," he says.

"Only in very large organisations, which may use AWAs for union avoidance, did AWA workers receive higher average wages than workers on registered collective agreements. AWA workers in industries with known union avoidance behaviour - like communications and government administration - also received higher average wages than workers on collective agreements."

The report found that in industries such as manufacturing, transport, health and construction, where labour costs were important, AWAs paid well below registered collective agreements.  

"Interestingly, even mining AWAs paid below collective agreements," says Peetz.

"The study also found workers with the weakest bargaining power - labourers and related workers - had the biggest wages shortfall for AWAs. In hospitality, the only industry where you can get representative data on award wages, AWAs paid even less than awards.

"The results suggest that minimising labour costs is an important element in AWA strategising, and any flexibility benefits that exist are not enough to offset the effects of cost minimisation on wages."