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Minimum wage to rise 3.5% following Fair Work review

The Fair Work Commission has announced a 3.5% increase to minimum wages effective from 1 July 2018, increasing the minimum rate from $18.29 per hour to $18.93 per hour.

The commission’s annual wage review brings the weekly minimum wage for a full-time worker to $719.20 per week, an increase of $24.30. The rate applies to employees on the modern award or a registered agreement.

The increase is greater than last year, when the minimum wage rose 3.3% to $18.29 per hour.

The Australian Council of Trade Unions (ACTU), which had called for a 7.2% increase in the minimum wage (amounting to an extra $50 a week), described the rise as ‘step in the right direction’, but cautioned that it will ‘still leave some full-time workers struggling’. ‘People who have been forced into poverty by the inadequacy of this wage should not have to wait every year to see if they will be saved by the Fair Work Commission,’ said ACTU secretary Sally McManus.

The commission said economic indicators pointed to a healthy national economy and labour market. ‘The circumstances are such that it is appropriate to provide a real wage increase to those employees who have their wages set by the national minimum wage or by a modern award,’ said commission president Iain Ross.

However, the commission ruled that the 7.2% increase the ACTU sought would have risked reducing employment opportunities for the already marginalised. ‘Such adverse effects will impact on those groups who are already marginalised in the labour market and on households vulnerable to poverty due to loss of employment or hours,’ said Ross.

Australian Chamber of Commerce and Industry CEO James Pearson said in a statement that the increase would be a risk for employers. ‘This minimum wage increase will intensify pressure on people running small businesses, many of whom are already struggling,’ said Pearson. ‘More than half of small business owners earn less than $50,000 per year, and there will be a point at which they will wonder why they bother if wages are raised by more than prices, and business overheads are too high.’

The Australian Retailers Association (ARA) was also critical of the wage increase, having advocated for an increase of 1.9% in line with inflation. ARA executive director Russell Zimmerman described the move as ‘detrimental’ for the retail sector, adding, ‘With retailers already struggling to keep their heads above water, today’s 3.5% minimum wage increase will stifle retail growth and delay staff employment across the sector.’



Category: Local news