Fair Work Commission: National minimum wage to rise 3 per cent from July 1

From July 1, about 2.2 million Aussie workers will get a little extra cash in their pockets. But not everyone is impressed by the wage boost.

Millions of Aussies will be better off within weeks after the Fair Work Commission increased the minimum wage by 3 per cent.

It means around 2.2 million Australian workers will earn an extra $21.60 per week — or $1090 a year — from July 1.

The decision, announced this morning, will see the minimum wage rise to $740.80 a week or $19.49 an hour.

It’s down from last year’s 3.5 per cent boost, due to current economic conditions.

But not everyone is impressed by the announcement.

Within moments of the decision being revealed, Aussies took to Twitter to complain that the “measly” pay rise would not be enough to ease cost of living pressures for those doing it tough.

A 3.5 per cent wage increase is simply not enough. Yet again the Fair Work Commission has got this wrong.

— The AMWU (@theamwu) May 30, 2019

Fair Work Commission has announced their decision on minimum wage, roughly up 3% ($19.49 p.h) or about $21 per wk. Comes into effect 1 July 2019

I s'pose it's better than nothing but it is nowhere near enough.

And, it ain't gonna be much help to retail/consumer spending#auspol

— 💧Bee🐝 (@BelindaJones68) May 30, 2019

That's nothing - my rent went up $35 just last week

— Scooter Bodgie goes bot, bot, bot (@ScooterBodgie) May 30, 2019

"The Fair Work Commission" and their measly 3% increase. What's 20 bucks? Four cups of coffee? One smashed avo slice? Fair go Unfair Work Commission. #auspol #wageincrease

— PoetrybyNature (@PoetryOfNature) May 30, 2019

Australian unions had been pushing for a six per cent increase, which would have equated to an extra $43 per week rise, while business groups wanted a lower increase of up to 2 per cent, or $14.40 a week.

Before the decision was announced, the Australian Council of Trade Unions (ACTU) urged the Fair Work Commission to support a fairer salary for workers, tweeting that: “No full-time worker should earn a wage that leaves them in poverty. It’s time for a living wage.”

In a statement following the announcement ACTU assistant secretary Liam O’Brien said the increase was a win for workers, but that there was still more to be done.

“This is a welcome pay rise for millions of low paid workers, especially in the face of further penalty rate cuts in a few weeks,” he said.

“We have a long way to go to ensure that the minimum wage is enough for workers to live on and support their families.

“No one in Australia should be living in poverty while working full time, but we know that thousands of people are facing this reality.

“The union movement continues to win big increases in the minimum wage despite the opposition of the Morrison Government and its big business lobbyist mates and their attempts to suppress wages.”

Meanwhile, the country’s wage growth has stalled at historically low levels, with the Australian Bureau of Statistics’ most recent Wage Price Index revealing the nation had experienced an annual wage growth of 2.3 per cent for three consecutive quarters.

Fair Work Commission president Iain Ross said this year’s minimum wage hike was smaller than last year’s because of the recent drops in gross domestic product growth and inflation.

“We are satisfied that the level of increase we have decided upon will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment,’’ Mr Ross said.

Fair Work Commission president Iain Ross has announced a minimum wage boost. Picture: Gary Ramage

“However, such an increase will mean an improvement in real wages for those employees who are reliant on the national minimum wage and modern award minimum wages and an improvement in their living standards.

“The prevailing economic circumstances provide an opportunity to improve the relative living standards of the low paid, and to enable them to better meet their needs, by awarding a real increase in the national minimum wage and modern award minimum wages.”

However, he said there was some good news when it came to the Australian economy, with the labour market performing well.

“Although business conditions have declined from the high levels recorded in the first half of 2018, they remain consistent with trend growth in the economy and the labour market has performed strongly,” he said, adding that we had record levels of Australians of working age in jobs.

At the moment, Australia’s national minimum wage is $719.20 a week — and earlier this year, Reserve Bank governor Philip Lowe threw his support behind a 3.5 per cent increase, claiming that stalled wages affected spending.

“Many people borrowed assuming their incomes would grow at the old rate and they haven’t,” he said at the time.

“They’re having more difficulty, they’ve got less free cash and so they can’t spend, so this is why I’ve put so much emphasis on the need for a pick-up in wage growth.”

During today’s announcement, Justice Ross pointed out that there were still more female workers on the minimum wage than men.

“An increase in the NMW and modern award minimum wages will assist in reducing the gender pay gap,” he said.

Ernst & Young chief economist Jo Masters welcomed the increase, claiming it would offer a “real wage increase” — and improve the living standards of hardworking Australians.

“The Fair Work Commission’s decision is lower than the ACTU’s 6 per cent submission, but higher than the 2 per cent proposed by business. The minimum wage increase directly impacts around 20 per cent of the labour force, with a further 20 per cent impacting through agreements based on ‘minimum wage plus’,” Ms Masters said.

“With the Reserve Bank of Australia also commenting on the expected boost to income from the tax strategies, it will be important for the new Government to pass the necessary legislation as soon as parliament resumes.

“Economic growth is clearly moderating and a slowdown in consumption is a big part of that. A key question now is whether any income growth, from tax policy, the minimum wage increase or otherwise, is spent or saved, bearing in mind that household debt is closing in on 200 per cent of disposable income. Given this, data on the consumer through Q3 and Q4 will be critical.”

With wire copy

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