Australia’s Fair Work Commission has confirmed that the minimum wage will be increased by just under 2% to $19.84, or around $753.80 for a full-time employee per week.
The minimum wage was increased by 1.75% this morning by the Fair Work Commission, who increased it from $740.80, or $19.49 per hour, where it has sat since the 1st of July, 2019.
The decision will impact 2.2 million employees around Australia that are reliant on minimum wages.
Award rates received an increase, too, with the modern award minimum wage receiving the same 1.75% increase, however, the roll-out of these award rates is set to be staggered throughout the remainder of the year.
Iain Ross, Commission president at the Fair Work Commission has said that “we note that the Australian economy is going through a significant downturn and is almost certain to enter a recession, the first in almost 30 years.”
“The shock to the labour market has been unprecedented,” they continued to explain, adding that “the unemployment rate has increased; the number of hours worked has fallen; and there has been a substantial increase in underemployment.
The increase is just under half the size of the 3% increase that the Fair Work Commission mandated last year.
“The uncertainty surrounding the pathway out of recession have led us to adopt a cautious approach to both the quantum and the timing of an adjustment to minimum wages,” they said. “The outlook, including the nature and speed of the expected recovery, remains highly uncertain,” Commissioner Ross said.
“The majority have decided to award substantially lower increase this year due to the marked changes in the economic development, and the recent tax transfer and other changes which have benefited low-paud households,” he concluded.
In terms of the roll-out of award wages, as of the 1st of July, Group 1 Awards changes will be made for frontline healthcare workers, social assistance workers, teachers, child care workers and those employed in other ‘essential’ services.
The second group, made up of construction workers, manufacturers and “a range of other industries” will be eligible for their wage increase as of the 1st of November.
Finally, in February of 2021, the third and final group will receive their increase, which includes accommodation and food services, arts and recreation services, aviation, retail trade and tourism.
The ACTU’s Secretary, Sally McManus has welcomed the “very modest” increase, but said it was “disappointing” to hear of the staggered awards release, which some workers, depending on their industry would not receive an increased award until 2021.
“However, it is clear in the decision that this panel of experts recognise that cutting wages in the middle of this crisis would be a disaster for working people and the economy and they have rejected the arguments put by some employers to effectively cut wages by freezing the minimum wage,” she said.
“Many of the workers who will benefit directly from this decision are the essential workers who have been getting us through the pandemic. They deserve to have their wages protected,” Mcmanus concluded.
Those opposed, like the Australian Chamber of Commerce and Industry have lashed out at the decision, labelling it a “dangerous misstep” that would eventuate in businesses paying more than $1.4 billion at a particularly difficult time.
CEO of the Australian Chamber of Commerce and Industry, James Pearson said that “it defies common sense to yet again increase the highest minimum wage in the OECD.”
“It equates to an increase of $13 per minimum wage worker per week, but compound that by the number of employees and weeks per year and the cost is a staggering $1.4 billion to Australian businesses.”
“That money could have been spent on saving jobs or hiring new people,” Mr Pearson concluded.