Increase expected to help 2.6 million workers, government says
Australia's national minimum wage and award wages will see a 3.75% hike starting July 1, according to the decision of the Fair Work Commission (FWC).
In the decision released on Monday, the FWC said it primarily considered the cost-of-living pressures that modern-award-reliant employees continue to experience.
"Modern award minimum wages remain, in real terms, lower than they were five years ago, notwithstanding last year's increase of 5.75%, and employee households reliant on award wages are undergoing financial stress as a result," the FWC said in its decision.
"This has militated against this Review resulting in any further reduction in real award wage rates."
The FWC also noted that it wasn't appropriate to increase award wages above the inflation rate, citing that labour productivity is "no higher than it was four years ago."
"We have taken into account that the labour market and business profit growth overall remain strong, but the picture is less positive in some of the industry sectors which contain a large proportion of modern-award-reliant employees," the FWC added.
What it means for employees
Treasurer Jim Chalmers said the 3.75% increase means the national minimum wage earners will be paid $24.10 per hour, $33.10 per week, and an additional $1,721 per year.
Latest News
"The Fair Work Commission's Annual Wage Review decision is a win for workers, a win for women and it will help with the cost of living," the treasurer said in a statement.
"The 3.75% increase to modern award minimum wages will directly help 2.6 million workers."
Employers react
But the 3.75% hike is much higher than the proposed 2.8% increase proposed by businesses.
The Ai Group, national employer association, said the hike will expose low-wage employees to greater risks of unemployment and underemployment.
"The FWC decision is a clear repudiation of the ACTU's reckless call for a five per cent increase which is manifestly greater than inflation. It has nonetheless granted a significant increase in minimum and award wages," said Innes Willox, Ai Group chief executive, in a statement.
"We estimate this decision will directly increase the national wages bill by around $5.2 billion over the coming financial year. It will increase the full-time minimum wage by $33.10 to $915.90 a week."
Gender undervaluation proceedings
Meanwhile, the FWC also announced that it will initiate proceedings to address gender undervaluation in some modern awards.
These awards, identified after gender equity research by the FWC, include those applicable to early childhood education and care workers, disability home care workers and other social and community services workers, dental assistants, medical technicians, psychologists, other health professionals and pharmacists.
"These proceedings will commence shortly after the issue of this decision and we intend that they will be completed by the time of next year's Review, which will then move on to the consideration of other gender undervaluation issues," the FWC said.
The announcement follows the request made by the Australian Council of Trade Unions (ACTU) for a nine per cent interim increase in "feminised" industries.
"The FWC's decision to not grant an ACTU claim for 9% interim increases in certain major awards on gender-equity-related grounds, and to instead further consider such matters in separate proceedings over the year ahead is sensible and commendable," the Ai Group said.