The Fair Work Commission has handed down its decision in its annual wage review, lifting the national minimum wage by 5.2 per cent.
The change follows calls from trade unions to increase the national minimum wage by 5.5 per cent while small businesses and employer groups had suggested a more modest increase.
In a move that will affect over 2.7 million Australian workers, the minimum wage will now stand at $21.38 per hour ($821.60 per week) and will come into effect from 1 July 2022. However, workers in the aviation, hospitality, and tourism sectors can expect to see this implemented in October due to “exceptional circumstances” affecting business recovery in these sectors.
In 2021, the minimum wage was increased by 2.5 per cent. According to FWC president Justice Iain Ross, the factors that played into the new rate were “a sharp increase in the cost of living and the strengthening of the labour market.”
The Australian Council of Trade Unions (ACTU) called this a historic wage increase but noted that there’s more work to be done.
“The union movement fought hard for this increase, standing up for the quarter of Australian workers who rely on this process for a pay rise,” noted ACTU Secretary Sally McManus. “This Annual Wage Review is one tool we have to generate wage growth, but it only affects one in four workers – we need wage growth across the economy.”
Meanwhile, the National Retail Association has blasted the national wage increase as “completely out of touch with reality.”
“This increase is completely out of touch with the reality of modern business, and it will result in many workers losing their jobs,” said Dominique Lamb, Chief Executive, National Retail Association.
“This comes on top of two recent interest rate hikes, which will drive up overdraft and business loan payments, and will coincide with the 0.5 per cent jump in superannuation from July 1.”
The Australian Chamber of Commerce and Industry (ACCI) also called the increase “too much” amid current economic pressures.
“Having only just begun to recover from the pandemic, small businesses are now facing surging energy prices, continued supply chain disruptions, the second worst workforce shortages in the OECD, and the prospect that inflation could reach 7 per cent,” ACCI chief executive Andrew McKellar stated.
“This annual wage decision imposes an unnecessarily complex outcome on businesses who are already facing a difficult and disparate set of economic circumstances. It’s not what we need in a modern, flexible and international competitive economy where increased focus on higher productivity is needed.”
The government is likely to welcome the Fair Work Commission’s decision. In May, it had supported calls to lift the minimum wage to fall in line with surging inflation so that “Australia’s low-paid workers do not go backwards.”