Pragmatic Fair Work ensures low-paid don’t go backwards

The nation’s lowest-paid workers will get a $33.10 a week increase.

The Fair Work Commission has made a pragmatic decision to award a $33.10 a week increase to the nation’s lowest paid workers, largely splitting the difference between competing union and employer claims.

The 3.75 per cent rise is slightly above the latest inflation figure, delivering on the government’s position that the real wages of more than 2.6 million minimum wage and award-reliant workers should not go backwards.

Commission president Adam Hatcher emphasised that a primary consideration had been that low-income households continued to experience cost of living pressures despite the fall in the inflation rate since last year.

Modern award minimum wages remain, in real terms, lower than they were five years ago, notwithstanding last year’s increase of 5.75 per cent, resulting in low-paid workers continuing to experience financial stress.

However, the commission baulked at an increase closer to the ACTU’s 5 per cent claim, citing labour productivity being no higher than it was four years ago and productivity growth only recently returning to positive territory.

While the labour market and business profit growth generally remained strong, Hatcher said the picture was less positive in some of the industry sectors which contained a large proportion of modern-award-reliant employees.

Further moderating factors were that award-reliant workers would benefit from the looming stage three tax cuts and cost of living relief measures in the budget, while employers will face a further 0.5 per cent superannuation guarantee increase from July 1.

In a rebuff to unions, the commission has deferred the ACTU’s separate claim for a further four per cent pay rise for award-reliant workers in female-dominated industries.

A decision will not occur until next year. Given the signals sent by the commission during the proceedings, the delay is unsurprising.

Overall, the commission has sought to balance the competing interests of workers and employers, helping alleviate cost of living pressures on struggling households while ensuring businesses do not face unsustainable additional costs.