Australia’s lowest-paid workers will get a $24.30-a-week pay rise after the Fair Work Commission lifted the national minimum wage to $719.20 a week.
In a decision that will affect up to 2.3 million Australian workers, the FWC has increased the minimum wage by 3.5 per cent, or $18.93 an hour, from July 1.
The increase was less than the $50-an-hour sought by unions, though it was almost double the below-inflation rise of $12.50 a week business groups proposed.
The Fair Work decision was made in the context of strong growth in full-time employment, which is higher than it was at the time of last year’s review.
FWC President Iain Ross said it was appropriate to provide a real wage increase but not of the size proposed by the ACTU.
He said granting a $50-a-week increase would risk “adverse employment effects”.
“Such adverse effects will impact on those groups who are already marginalised in the labour market and on households vulnerable to poverty due to the loss of employment or hours,” he said. “An increase of the magnitude they propose would also carry a substantial risk of reducing the employment opportunities for low-skilled workers, including many young persons looking for work.
Mr Ross said the increase would not create “undue” inflationary pressure and was “highly unlikely” to have a negative impact on employment.
“However, such an increase will mean an improvement in the real wages of those employees reliant on the national minimum wage and modern award minimum wages and will, absent any negative tax transfer effect, result in an improvement in their living standards,” he said.
“Compared to the position at the time of last year’s review, the economic indicators now point more unequivocally towards a healthy national economy and labour market.
“The circumstances are such that it is appropriate to provide a real wage increase to those employees who have their wages set by the national minimum wage or by a modern award.”