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Australia’s Minimum Wage Workers To Receive 3.75 Percent Pay Rise
https://www.whatjobs.com/news/world-news/australias-minimum-wage-workers-to-receive-3-75-percent-pay-rise
The lowest-paid workers in Australia will receive a 3.75 percent pay increase over the next year, as announced by the Fair Work Commission.
This increase, effective from July 1, will raise the minimum weekly wage to $915.90.
This is up from $882.80, and hourly wages to $24.10 from $23.23.
The decision impacts about one in four Australian employees.
While this raise aligns with the Reserve Bank's inflation targets, it has disappointed unions like the Financial Services Union (FSU), which had advocated for a five percent rise.
Fair Work Commission President Adam Hatcher explained raising wages significantly above the inflation rate was inappropriate, primarily due to stagnant labor productivity.
The federal budget forecasts consumer price inflation to end this financial year at 3.5 percent and drop to 2.75 percent by June 2025.
Similarly, the Reserve Bank projects annual inflation to be 3.8 percent for the current quarter, easing to 3.2 percent next year.
The commission highlighted concerns that a larger wage increase could negatively impact sectors heavily reliant on minimum-wage workers.
For example, the retail sector saw a 1.3 percent decline in jobs over the past year, while the accommodation and food service sectors experienced a 2.9 percent drop in employment and a 5.8 percent reduction in hours worked.
Conversely, the healthcare and social assistance sector showed robust growth, with a 9.2 percent increase in jobs and hours worked.
The 3.75 percent pay rise is compared with the 4.1 percent wage price index growth for the year ending March.
Employer bodies like AiGroup had recommended a 2.8 percent increase, while the Australian Council of Trade Unions (ACTU) sought a 5 percent rise.
Treasurer Jim Chalmers and Employment Minister Tony Burke endorsed the pay hike, noting that it increases the total since the Albanese government took office to $143.30 per week for minimum wage earners.
They emphasized that boosting wages is crucial for addressing cost-of-living pressures.
The Fair Work Commission also announced plans to prioritize examining gender undervaluation in modern awards for the next year, covering roles such as early childhood educators, disability care workers, and health professionals.
Stephen Wu, a Commonwealth Bank economist, pointed out that despite the increase, real award wages remain below pre-pandemic levels.
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He noted that tax cuts and government spending would provide additional support.
However, Luke Achterstraat, CEO of the Council of Small Business Organisations Australia, warned that the wage hike could strain small businesses, leading to higher prices and potential job losses.
He argued that a $50 wage increase would increase total costs for small business owners by $59.
The commission estimated that those earning $1,067 a week would benefit from a tax cut of about $20.50 weekly, with median wage earners seeing a $33.85 increase.
Despite these benefits, wage increases have generally lagged behind price rises in recent years.
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