Australia’s minimum wage earners to get $40 a week pay rise,

Episode 62,   Jun 16, 2022, 01:18 AM

Minimum wages will increase by at least $40 a week, with the hourly pay rate lifting from $20.33 to $21.38, the Fair Work Commission has ruled.

The commission handed down its decision in the annual wage review on Wednesday, granting a 5.2% increase to the national minimum wage and 4.6% for award minimums, amid a tight labour market and skyrocketing inflation.

The decision sets the pay of at least 2.7 million Australians on the national minimum or awards and will come into effect from 1 July.

But the commission ruled the increase will be delayed to 1 October in the aviation, tourism and hospitality sectors because of “exceptional circumstances”, including their slower recovery from the Covid recession.

The prime minister, Anthony Albanese, welcomed the decision and said it vindicated his position during the election campaign when he said he would “absolutely” back a wage rise in line with the 5.1% inflation rate.

“It makes a difference to people who are struggling with the cost of living, and it justifies our position that we took in making a different submission to the Fair Work Commission, that said we did not want people who are on the minimum wage to go backwards,” Albanese said at a press conference in Gladstone.

“Many of those people who are on the minimum wage are the heroes who saw us through the pandemic. These workers deserve more than our thanks, they deserve a pay rise and today, they’ve got it.”

Unions had asked for a 5.5% lift in the national minimum from $20.33 to $21.45 an hour, while employer groups had suggested more modest rises of about 2.5%.

A submission by the Albanese government called for low-paid workers’ pay not to go backwards, meaning a 5.1% increase in line with headline inflation, which the Reserve Bank of Australia has suggested will go as high as 7% by year’s end.

The Fair Work Commission president, justice Iain Ross, acknowledged that by ordering an increase lower than inflation some workers would receive a real wage cut, but suggested this could be fixed in later years.

The union movement welcomed the decision.

Sally McManus, secretary of the Australian Council of Trade Unions, said unions had “fought hard” for the increase against “employers pushing for big real wage cuts”.

But McManus said the review only sets pay for one in four workers, while changes were needed to bargaining laws to help get “wage growth across the economy”.