Union call for 8 per cent rise for low paid

United Workers Union national secretary Tim Kennedy says workers on the minimum wage should be awarded a ‘real increase’ by this year’s annual wage review,

Fair Work Commission president Adam Hatcher.

A key national union has urged the Fair Work Commission to back an 8 per cent minimum wage increase for the nation’s lowest-paid workers.

United Workers Union national secretary Tim Kennedy said workers on the minimum wage should be awarded a “real increase” by this year’s annual wage review, meaning they should receive a rise above the annual inflation rate of 7.8 per cent.

Mr Kennedy said the Albanese government should maintain the position it took to last year’s wage review that the real wages of low-paid workers should not go backwards.

While awarding a 5.2 per cent increase to workers on the minimum wage, the commission last year sought to mitigate the impact by granting lower rises to more than two million workers on higher award rates.

Mr Kennedy said the two million workers on award rates should this year receive an increase in line with inflation, meaning as much as 7.8 per cent according to the last quarterly ­inflation data. Monthly data ­suggests the inflation rate is falling slightly but still above 7 per cent.

Mr Kennedy said the UWU had the largest group of workers that relied on the minimum wage, including those working in early childhood education, hospitality and horticulture.

“There’s a narrative starting to come out that inflation is heading down but our view remains that people are dealing with that high cost of living right now,” Mr Kennedy said.

“Therefore we think, at a minimum, there’s no reason economically or socially not to at least maintain their wages position.

“In fact, we say a real increase is needed at the bottom end to take the pressure off. That would be justifiable given all economic indicators.”

The UWU boss said inflation was being driven by a “price increase spiral rather than a wage increase spiral”.

“The profit price spiral is the problem and the failure to award an appropriate wage increase now would just add to the pain of low-paid workers in the future given we had huge energy price markups announced yesterday and also rents are right up, city and country.”

The ACTU will submit its claims for this year’s minimum wage increase by the end of the month. Mr Kennedy said his union would support the ACTU position.

The review will be headed by new commission president Adam Hatcher.

Employment and Workplace Relations Minister Tony Burke said the current 3.3 per cent wages growth was “now stronger than … for effectively the entire time the previous government was in office”. He said he was “not at all” worried about the possibility of a wage-price spiral.

“I can tell you why I‘m not worried about a wage-price spiral. A wage-price spiral is driven by high wages growth. Australia does not have high wages growth, so that’s how I know it’s not driving inflation,” he said.

Research by the Australia Institute’s Centre for Future Work found corporate profits, not wages, was the main driver of inflation. It said inflation would have stayed within or near the Reserve Bank target band if companies had not squeezed consumers through excessive price increases.