Retailers back 3.8 per cent wage rise for low-paid

Coles and Woolworths among the major companies supporting the increase.

Major retailers, such as Coles, support a 3.8 per cent increase in minimum and award wages from July 1.

Major retailers including Coles, Woolworths, Kmart, Harvey Norman and Amazon have supported a 3.8 per cent increase in minimum and award wages from July 1, the highest rise for the low-paid proposed by employers.

The companies are members of the Australian Retailers Association which has told the Fair Work Commission that it backs “a sustainable increase in the minimum wage to help retail workers keep pace with the rising cost of living”.

The position is higher than other employer groups that have backed up to 3.5 per cent, while the ACTU supports a 7 per cent rise.

The federal government has urged the commission to ensure the real wages of the lowest paid “do not go backwards”.

In its submission, the ARA says the increase in wages should be based on the underlying rate of inflation at the time the commission hands down its decision.

It wants the commission to award a 3.8 per cent pay rise based on the trimmed mean inflation rate of 6.9 per cent less the Reserve Bank’s projected 3.1 per cent decrease in inflation over the course of the next financial year.

“This recommendation equates to a 4.3 per cent increase in labour costs for employers, including the impact of the next (0.5 per cent) increase in superannuation that will take effect at the same time as the next increase in the minimum wage,” it says.

“We believe an increase of this magnitude strikes the balance between an employer’s ability to keep pace with the rising costs of doing business, against an employee’s expectation that wages grow in line with prices.

“We also believe that any increase in the minimum wage should be balanced carefully against the impact it could have on the rate of unemployment, with due consideration to the prevailing and projected economic conditions. In the context of today’s tight labour market and peak inflation, it is important that a wage-price spiral is avoided.”

The ARA says a pay rise that exceeds the underlying rate of inflation would need to be offset by productivity gains to reduce the risk of wages growth creating inflationary pressure and to “avoid overstretching smaller retailers who have limited reserves to incur higher labour costs, in addition to higher costs of doing business”.

Catholic bishops, through the church’s council for employment relations, called for a 7.2 per cent increase in recognition of the significant cost-of-living pressures faced by the low-paid.

“The Catholic Church has a long history of advocating for a safety net minimum wage which provides workers with wages that provide for a fair and decent standard of living,” Bishop Michael Kennedy, the Bishop Delegate for Employment Relations, says.

He says detailed work by senior research fellow Tom Barnes and his team “reveals that the ethical stance we take, that some of our lowest-paid workers need a pay rise to live above the poverty line, is compatible with what can be paid by most businesses”.

Almost five million Australians are living at or below the poverty line – defined as 60 per cent of median equivalised household disposable income. “A decent proportion of that number is made up of people who work full-time,” the submission says.