Australia's lowest-paid workers are more likely to be found living in the richest 20 per cent of households than they are in the poorest 20 per cent, prompting arguments that minimum wage increases being pushed by Labor and unions are a blunt tool and that a better way to lift people's living standards is through reforming tax and transfers.

The fresh data compiled by the Melbourne Institute of Applied Economic and Social Research from The Household, Income and Labour Dynamics in Australia (HILDA) survey show that 13.8 per cent of the lowest-paid workers, as measured by the bottom 20 per cent of employees in terms of hourly pay, are living in the richest 20 per cent of households while 13.6 per cent are living in the poorest 20 per cent.