Opinion split over minimum wage increase

by 04 Jun 2010

The announcement of a $26 a week wage rise to 1.45 million low-paid workers was met with mixed responses yesterday.

Fair Work Australia stated that the minimum wage would rise to $569.90 from July 1.

The tribunal's full bench said there had been a significant decline in the real value of minimum wages since March 2008.

It said the increase “could be awarded without threatening business viability, employment growth or adding to inflation”.

ACTU Secretary Jeff Lawrence said the decision was a “very good outcome” for working Australians that goes a long way towards “restoring the real value of wages for the most low-paid and vulnerable members of the workforce.” “It delivers the decent rise to minimum wages that working families need and is further indication that working Australians are much better off under the Labor Government’s new Fair Work laws,” he said.

But the reaction from business groups was somewhat different.

Australian Industry Group chief executive Heather Ridout condemned the FWA’s minimum wage increase, claiming it was out of sync with an economy that has seen the balance of risk and sentiment shift downwards in recent times. "The $26 per week increase comes at a time when employers are still dealing with the effects of the downturn, global conditions are uncertain and consumer confidence is weakening,” she said.

The Australian Chamber of Commerce and Industry added that while a case existed for a modest increase, the decision went “well beyond what was responsible or justified”.

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