Australia's Lowest-Paid Workers Set for 5.75% Minimum Wage Boost

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Australia’s Lowest-Paid Workers Set for 5.75% Minimum Wage Boost

Date: Fri 2 Jun 2023

Overview:

The Fair Work Commission has announced that the minimum and award wages will increase by 5.75% starting from 1 July. This means that around 2.75 million workers will receive a higher salary. The new minimum wage will be $882.80 per week or $23.23 per hour. Some workers who receive the national minimum award will even see an 8.6% increase in their wages.

The decision by the Fair Work Commission is a compromise between what business groups and trade unions were advocating for. Although it may not meet everyone’s expectations, it is still a positive move forward.

However, it’s important to note that the wage increase is slightly lower than the current inflation rate by about 1%. This means that workers’ salaries haven’t been able to keep pace with the increasing costs of goods and services. In fact, wages have been growing at a much slower rate than consumer prices.

Adam Hatcher, the President of the Fair Work Commission, believes that this increase will help overall wages grow modestly in the coming year. Last year’s wage increase had a positive impact on workers, but it didn’t contribute much to the overall wages growth.

Employment Minister Tony Burke is happy with the decision and sees it as a good outcome for workers. He also acknowledges the need to address loopholes that allow employers to pay lower wages. This issue will be tackled later this year.

Some people are concerned that the wage increase could lead to higher interest rates, but Burke disagrees. He believes that other factors, like international forces and problems in supply chains, are causing inflationary pressures.

The Reserve Bank will assess the impact of this decision when they meet to decide on interest rates. Investors were already predicting a rate hike before the announcement, and it’s likely to happen in the near future.

On the other hand, Andrew McKellar, the CEO of the Australian Chamber of Commerce and Industry, has concerns about the wage increase. He thinks it will put a burden on small businesses and contribute to rising costs, such as energy. Many small and family-owned businesses that pay minimum and award wages will be affected.

Overall, this wage increase is a positive step for workers in Australia, although it falls slightly short of the inflation rate. The impact on the economy and small businesses remains to be seen.