The raise will come into effect in July
The national minimum wage in Australia will increase by 3.5% after a decision by the Fair Work Commission (FWC).
The move – announced today following an annual wage review – will mean 2.9 million of the lowest paid workers will receive a pay increase from July 1.
The Commission said higher inflation in the past four years meant living standards for employees “dependent upon Modern Award wages have been squeezed, and the low paid have experienced greater difficulty in meeting their everyday needs.”
“The Reserve Bank's assessment that inflation has sustainably returned to its target range of two to 3% indicates that this inflationary episode is now over. This provides us with an opportunity to go at least some of the way towards correcting what has happened over the last four years by awarding a real increase to Modern Award wages and the national minimum wage,” the Commission said.
“We are concerned that if this opportunity is not taken in this annual wage review, the loss in the real value of wages which has occurred will become permanently embedded in the modern awards system, and the national minimum wage and a reduction of living standards for the lowest paid in the community will thereby be entrenched.”
The Commission say this increase is sustainable because of a strong labour market, employment growth and low unemployment.
The raise in pay has been backed by the Albanese government and has previously urged the commission to back a real wage increase that is “economically sustainable,” with the federal budget forecasting a 2.5% inflation rate this financial year – rising to 3% in 2025/26.
The Australian Council of Trade Unions (ACTU) called for a 4.5% rise, equivalent to $41.22 a week.
This had also been opposed by the Australian Chamber of Commerce and Industry and the Australian Restaurant and Café Association, pushed for a 2.5% and 2% rise respectively – with the latter union saying its members wouldn’t be able to “absorb wage increases without price hikes.”
The Commission also noted more needs to be done in addressing other inequalities in pay.
“We intend to push forward with our targeted program to review particular Award classifications in order to eliminate gender based undervaluation of work in modern awards and ensure that female workers receive equal remuneration for work of equal or comparable value arising from last year's annual wage review decision, the Commission reviewed a number of priority awards,” the Commission said, in a press conference.
