Australia will increase its national minimum wage by more than 5 percent early next month, a decision made by the Fair Work Commission on Wednesday and blasted by the country’s national retail body.
The minimum wage will be lifted AUD 1.05 (USD 0.73) an hour from its AUD 20.33 (USD 14.16) base from 1st July, an increase of 5.2 percent, to AUD 21.38 (USD 14.89) an hour.
Workers on award rates will go up 4.6 percent with a minimum AUD 40 (USD 27.86) weekly increase for workers on award rates below AUD 869.60 (USD 605.59) per week.
The Fair Work Commission (FWC) said its decision would affect more than 2.7 million workers, including retail workers, as well other employees on enterprise agreements and other pay settings.
Australian Prime Minister Anthony Albanese first advocated for a pay rise of at least 5.1 per cent last month in line with inflation, and welcomed the FWC’s decision.
“The truth is that many of those people who are on the minimum wage are the heroes that saw us through the pandemic,” said Prime Minister Albanese.
However, Australia’s leading retail body, National Retail Association (NRA), said the wage increase ignores the financial pressure most retailers are currently facing.
“This increase is completely out of touch with the reality of modern business, and it will result in many workers losing their jobs,” said National Retail Association chief executive, Dominique Lamb
“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 percent jump in superannuation from 1st July. It will be the third strike for retailers, many of whom have not been able to pay their rent for the last two years and are also facing increase input prices, particularly in the restaurant and fast-food sector.
“The simple fact is that when businesses don’t have enough money to cover their expenses, they need to cut costs. There is no doubt that those cuts will lead to job losses in retail and no doubt in other areas of the economy as well,” added Lamb.
The NRA said the FWC had exceeded the initial ambit claim made by the union movement, of 5 percent, and almost matched the Australian Council of Trade Unions’ even higher revised claim of 5.5 percent
“Employer groups, including the NRA, have tried in recent years to propose modest but affordable increases for our valuable staff,” continued Lamb.
“Sadly, it seems this reasonable attempt at finding sensible middle ground has backfired.”
Australian retail sales recorded a 0.9 percent uptick for the month of April to AUD 33.9 billion (USD 23.67 billion).
April’s 0.9 per cent jump in retail spending is the fourth consecutive monthly rise in retail turnover this year, according to the Australian Bureau of Statistics.