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The Fair Work Commission has ruled that Australia’s lowest paid workers will receive a 3.3% pay rise a week.
This amounts to an increase of $22 a week, lifting the minimum wage to $694.90 a week.
The announcement will impact more than 2.3 million workers and the new rate applies from July 1.
The FWC president Iain Ross said the rate of increase will not lead to inflationary pressure and is very unlikely to have any measurable negative impact on employment.
"It will, however, mean an improvement in the real wages for those employees who are reliant on the national minimum wage and modern award minimum wages and an improvement in their relative living standards,” he said.
Ross noted that higher labour productivity, subdued inflation, and strong profit growth provided an opportunity to improve the living standards of Australians directly reliant on minimum rates of pay.
He added that the rate increase would not be sufficient to alleviate award-reliant employees from poverty, particularly households with dependent children and a single-wage earner.
However, he argued that an increase of that magnitude would likely have adverse employment effects on groups who are already marginalised in the labour market.
Ross also said that over the past five years the real value of the minimum wage and award rates had grown at 4.3%, less than half the growth of labour productivity.
The ruling is well below the rate the unions were seeking, with the ACTU hoping for an increase of at least $45 a week and United Voice arguing for $87.30 a week.
The Australian Industry Group and The Australian Chamber of Commerce and Industry were looking for an increase of only $10.10 a week and $8.10 a week respectively.
This amounts to an increase of $22 a week, lifting the minimum wage to $694.90 a week.
The announcement will impact more than 2.3 million workers and the new rate applies from July 1.
The FWC president Iain Ross said the rate of increase will not lead to inflationary pressure and is very unlikely to have any measurable negative impact on employment.
"It will, however, mean an improvement in the real wages for those employees who are reliant on the national minimum wage and modern award minimum wages and an improvement in their relative living standards,” he said.
Ross noted that higher labour productivity, subdued inflation, and strong profit growth provided an opportunity to improve the living standards of Australians directly reliant on minimum rates of pay.
He added that the rate increase would not be sufficient to alleviate award-reliant employees from poverty, particularly households with dependent children and a single-wage earner.
However, he argued that an increase of that magnitude would likely have adverse employment effects on groups who are already marginalised in the labour market.
Ross also said that over the past five years the real value of the minimum wage and award rates had grown at 4.3%, less than half the growth of labour productivity.
The ruling is well below the rate the unions were seeking, with the ACTU hoping for an increase of at least $45 a week and United Voice arguing for $87.30 a week.
The Australian Industry Group and The Australian Chamber of Commerce and Industry were looking for an increase of only $10.10 a week and $8.10 a week respectively.
