- Low-paid workers awarded 3.5 per cent increase
Australia’s 2.8million workers on awards have been given a 3.5 per cent wage increase that’s well above inflation to help them deal with years of wages failing to keep pace with the cost-of-living crisis.
The Fair Work Commission’s increase, coming into effect on July 1, was above the headline inflation rate of 2.4 per cent and in between what was sought by employers and unions.
But the annual wage review decision, affecting many low-paid workers, marked the weakest rise since 2021, when a 2.5 per cent increase was awarded and was weaker than last year’s 3.75 per cent increase.
It takes the full-time minimum wage to $947.96, marking a $32 weekly rise, as the minimum hourly pay goes to $24.94.
The decision will affect 2.6million Australians, or one in five workers, who are employed under one of 121 awards, along with the 180,000 people on the minimum wage.
Low-paid workers in the retail, hospitality, healthcare and administrative workers are the key beneficiaries.
Fair Work Commission president Adam Hatcher delivered the industrial umpire’s decision at 10am, AEST, on Tuesday, noting the low-paid are ‘disproportionately female’ and had suffered cuts in real wages adjusted for inflation until recently.
‘The principal consideration, which has guided our decision, is the fact that since July 2021, employees who are reliant on modern award minimum wages or the national minimum wage have suffered a reduction in the real value of their wage rates,’ he said.
Australia’s 2.8million lowest paid workers have been awarded a 3.5 per cent wage increase that’s well above inflation
‘This reduction in real modern award wages and the national minimum wage has been a result of the spike in inflation which commenced in 2021 and peaked in late 2022.’
Justice Hatcher, a Labor appointee, said while other Fair Work Commission decisions were generous, the industrial umpire had been concerned about a wage-price spiral and had therefore only awarded previous increases in line with inflation.
‘The continuation of this inflationary episode has meant that over the last three annual wage review decisions, the Fair Work Commission has repeatedly deferred taking any action to reverse this decline in real wages out of a concern that this might result in the persistence of higher inflation,’ he said.
The Australian Chamber of Commerce and Industry, the nation’s biggest employer group, had argued for a 2.5 per cent increase that barely kept pace with inflation while the Australian Council of Trade Unions had argued for a 4.5 per cent rise.
The latest increase is much smaller compared with recent years, given inflation has moderated since reaching a 32-year high of 7.8 per cent in late 2022.
But it is a full percentage point higher than the headline inflation rate of 2.4 per cent.
Under Labor, the minimum wage went up by 8.6 per cent in 2023 as awards rose by 5.75 per cent, which had been the biggest increase since 1990.
This followed a 5.2 per cent increase in 2022 that at the time had been the highest increase in the minimum wage since the mining boom in 2006.
The headline and underlying rates of inflation are now within the Reserve Bank of Australia’s two to three per cent target.
With unemployment still low at 4.1 per cent, workers outside of awards have more leeway to bargain for higher wages.
Under Labor, the minimum wage went up by 8.6 per cent in 2023 as awards rose by 5.75 per cent, which had been the biggest increase since 1990 (pictured is Prime Minister Anthony Albanese with Senator Dorinda Cox, who defected to Labor from the Greens)
