The national minimum wage will lift by 5.2%, as the Fair Work Commission notes the ‘sharp increase in the cost of living’. Minimum wages will increase by at least $50/week, with the hourly minimum wage lifting from $20.33 to $21.38. Following the annual wage review on Wednesday, the tight labour market and skyrocketing inflation have granted a 5.2% increase to the national minimum wage and 4.6% for award minimums that will protect the real value of the wages of the lowest-paid workers, while seeking to constrain inflationary pressures.
The decision will determine the pay of at least 2.7m Australians on the national minimum or awards and will come into effect from 1st of July. Albanese welcomed the decision and reaffirmed his position to ‘absolutely’ back a wage rise in line with the 5.1% inflation rate. Sally McManus, secretary of the Australian Council of Trade Unions said unions ‘fought hard’ for the increase against ‘employers pushing for big real wage cuts’.
However, Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry warned that the decision would impose a ‘risk to the economy, adding $7.9bn to employer’s cost. Depending on the capacity of businesses to pass on these costs, the decision creates substantial cost-push inflation and add will additionally fuel to the inflation fire. Individuals on the minimum wage are likely to be spending with a high MPC and each dollar earnt will be circulated back into the economy, providing support for consumption led economic growth.
