The Fair Work Commission has granted a $21.60 a week increase in the minimum wage that will flow through to 2.2 million workers from July 1.
The national minimum wage will rise by 3 per cent from $719.20 a week to $740.80 a week.
The Australian Council of Trade Unions had called for a 6 per cent, $43 a week rise while most business groups wanted a pay rise of about two per cent, limited to $13 to $14.40 a week in line with the inflation rate.
The ACTU claim was significantly higher than the above-inflation $24.30-a-week rise granted by the commission last year.
Australian Chamber of Commerce and Industry chief executive James Pearson said employers were concerned the three per cent rise “will put jobs in danger and risk the viability of some small businesses”. ACCI had urged the commission to grant a maximum $12.95-a-week increase, describing it as an “appropriate and prudent level of increase”.
“Australia already has one of the highest minimum wages in the world, and continuously increasing minimum wages by significantly more than inflation has consequences,” Mr Pearson said.
He said the increase would cost Australian employers an extra $3.1 billion per year.
“Employers respect the independent decisions of the Fair Work Commission, but a third straight increase well in excess of inflation will be difficult for businesses, particularly small businesses, to absorb,’’ he said.
“These increases will make it that much harder for more than 680,000 of our fellow Australians who are unemployed, and a further 1.1 million underemployed, to find a job or more hours of work.
“We hope today’s decision — the 10th straight annual increase in excess of inflation, and the third of 3 per cent or more — restores a sense of perspective to the minimum wage debate. Recent attempts to portray Australia’s minimum wage rules as failing working people are misplaced. It is time to get back to facts and encourage collaboration not conflict between employers and employees.”
The ACTU said the increase was a “step in the right direction” but fell far short of re-establishing the living wage and ensuring that no worker lived in poverty.
ACTU assistant secretary Liam O’Brien said the increase would leave the minimum wage more than seven per cent short of the living wage target — 60 per cent of the median full-time wage.
“This is a welcome pay rise for millions of low paid workers, especially in the face of further penalty rate cuts in a few weeks,’’ he said. “We have a long way to go to ensure that the minimum wage is enough for workers to live on and support their families.
“No one in Australia should be living in poverty while working full time, but we know that thousands of people are facing this reality.”
United Voice national secretary Jo-anne Schofield said the increase equated to 57 cents an hour and did not make up “for the years of neglect by an out of touch system that doesn’t understand low paid workers”.
“Fifty seven cents an hour will not remedy historically low wage growth in the face of real cost of living pressures,’’ she said. “Added to this, 700,000 hospitality and retail workers are just weeks away from the next 10 percentage point penalty rate cut. 57 cents an hour is cold comfort to those 700,000 workers facing their third annual pay cut.”
Handing down its decision, commission president Iain Ross said the expert panel has decided to award a smaller rise than last year’s 3.5 per cent increase due to changes in the economic environment, particularly the recent fall in GDP growth and the drop in inflation.
The panel also took into account recent tax-transfer changes which have provided a benefit to low-paid households.
“We are satisfied that the level of increase we have decided upon will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment,’’ he said.
“However, such an increase will mean an improvement in real wages for those employees who are reliant on the national minimum wage and modern award minimum wages and an improvement in their living standards.’’
He said despite the recent fall in GDP growth, the Australian economy had performed moderately well and the relevant data indicated a strong labour market.
“Although business conditions have declined from the high levels recorded in the first half of 2018, they remain consistent with trend growth in the economy and the labour market has performed strongly,’’ he said.
The proportion of the working-age population that is in employment is at record levels, he said.
“The prevailing economic circumstances provide an opportunity to improve the relative living standards of the low paid, and to enable them to better meet their needs, by awarding a real increase in the national minimum wage and modern award minimum wages.”
He said relative living standards of minimum wage and award-reliant employees had improved over recent years, although some low-paid award-reliant employee households have household disposable incomes less than the poverty line.
Originally published via The Australian