Australia’s lowest-paid workers will get a 5.2% pay rise in the biggest Fair Work Commission minimum wage rise for years, but they, like millions of other workers, will still fall behind the soaring cost of living.
The commission announced a 5.2% increase in the minimum wage this morning, taking it to $21.38 an hour. The minimum wage in modern awards will rise by 4.6%. About 2.7 million Australians on award and minimum wages will be directly affected by the changes, which will take effect from the first pay period on or after July 1. They’ll be delayed for the hospitality and tourism sectors until October.
The decision is a win for unions, which had argued for a 5.5% increase in a bid to protect low-income workers from surging inflation, while business groups argued for between 2.5% and 3%. It will also help boost wages growth later in the year as the rise washes through into official measures like the Wage Price Index.
But the increase isn’t retrospective: while inflation was 5.1% in the March quarter, it is expected to continue to rise. Last night, in an unprecedented appearance on ABC’s 7.30, Reserve Bank governor Philip Lowe predicted inflation would reach 7% by the end of the year, meaning real wages will fall across the board.
Millions of workers on EBA (enterprise bargaining agreements) and other arrangement where wages are rising more slowly — 2% to 4% — will fall further behind, as they have been doing off and on for the past five years or more.
The Fair Work Commission effectively agreed with the argument put by Labor during the election campaign, when Anthony Albanese backed a 5.1% rise for the lowest paid, saying “the low paid are particularly vulnerable in the context of rising inflation”.
The Coalition’s response during the campaign was to attack Albanese and argue that real wages needed to fall. But for the lowest paid Australian workers, that fall will be smaller than for most of us after today’s decision.
OMG! Scotty will be chucking a wobbly.
It was ok for him to get 2.75%, but us mere plebs don’t need it. He was gunning for a 5.25. Was and still is a Fool.
Review the Industrial Relations Legislation to make bargaining a level playing field.
The minimum wage sounds like a lot but it will still cost half of it to rent most properties, when it is supposed to cost one third ideally.
To call it an increase is a nice rhetorical trick given that inflation makes money worth less. We’re caught in an argument that people should go backwards in real terms because we can look at the numbers and with a straight face call it a “raise”.
This should be just a start while specific sectors and/or occupations could well look forward to increases in real terms and improved conditions, if they understand demographic data…..
Of the course the LNP, Australian media, unions and even Labor resort to the old nativist conservative dog whistle ‘immigrants’ are taking our jobs, includes some political activists masquerading as demographers &/or economists.
They have been promoting the ‘immigrants are taking your jobs’ trope for a generation and especially since 2007 by e.g. using headline student inflated NOM net overseas migration data; irrelevant and suboptimal analysis according to statistics 101 (assumes if no immigration nor students employees will be magically rewarded?).
The good news is increasing the influence of employees, hence, if unionised unions too, by demographic change. Although many ‘stenographers’ avoid it (deferring to UNPD defined NOM snapshots acting as a virtual border), the OECD produces demographic trends from the past into the future which describe the situation; quite stark like elsewhere.
https://data.oecd.org/chart/6KiL
The situation is that Australia’s working age passed the ‘demographic sweet spot’ pre Covid, due to baby boomers retiring (not more fertility) and any ‘free market’ should dictate that this will inevitably lead to improvements in working age income/wages & conditions?