The largest union body in the country has hailed the Fair Work Commission’s decision to boost minimum wages for millions of workers.
The Commission’s annual review found that the national minimum wage, as well as modern award minimum wages, should all increase by 3.5 per cent.
The increase will come into effect from July 1 this year. The current national minimum wage is $24.10 per hour, or $915.90 per week. A 3.5 increase will increase that to $24.94 an hour, or just over $30 more a week.
The decision will affect up to about three million Australians, according to government estimates during the election campaign, though only a small number of those are on the national minimum wage.
A further 20.7 per cent of Australian workers, according to Fair Work Commission president Justice Adam Hatcher, are paid the minimum wage applicable under modern workplace awards.
“The principal consideration which has guided our decision is the fact that, since July 2021, employees who are reliant on modern award minimum wages or the national minimum wage have suffered a reduction in the real value of their wage rates,” Hatcher said.
“In the case of modern awards, the benchmark C10 award rate of pay has declined by 4.5 percentage points relative to inflation as measured by the Consumer Price Index.”
Hatcher said that this had been due to the major spike in inflation which had begun in 2021.
“The result has been that living standards for employees dependent on modern award wages have been squeezed and the low paid have experienced greater difficulty in meeting their everyday needs,” he said.
However, with the Reserve Bank of Australia deeming inflation to be “sustainably” within the target rate of between 2 and 3 per cent, Hatcher said, it was appropriate to boost minimum wage payments above inflation.
“We are concerned that if this opportunity is not taken in this Annual Wage Review, the loss in the real value of wages which has occurred will become permanently embedded in the modern award system and the national minimum wage, and a reduction in living standards for the lowest paid in the community will thereby be entrenched,” he said.
The Australian Bureau of Statistics reported in March that inflation was at 2.4 per cent, unchanged from the previous quarter.
Australian Council of Trade Unions secretary Sally McManus praised the decision, despite the ACTU backing a larger 4.5 per cent increase.
“This decision delivers a 1.1 per cent real wage increase, one of the largest real wage increases the Fair Work Commission has awarded,” McManus said.
“This wage increase means those who are paid award wages will start to get ahead again, easing pressure on their weekly budgets and part of the stress that comes from having to cut back on the basics.”
Last year, the commission increased the minimum wage by 3.75 per cent.
