Lowest Paid Aussies To Get 5.75% Pay Boost
The Fair Work Commission decided that people on minimum and award wages will get a 5.75% pay rise. Around 2.75 million Australians will benefit from this decision. The pay rise will begin on 1 July.
On Friday, they announced that minimum wage will go up to $882.80 a week or $23.23 an hour. Certain workers will see an increase in their pay by 8.6%. This happens once a year.
The rise is in the middle of what AiGroup and the ACTU wanted. AiGroup wanted 3.8%. ACTU wanted 7%.
Adam Hatcher, the head of the Fair Work Commission, said that he is sure the increase chosen will slightly help the growth of wages in 2023-24.
One in four workers were affected by the 5.2% minimum wage increase last year. These workers' wages make up 11% of the national total. However, the increase did not really contribute to the total wages growth, as it only accounted for less than 10%. This did not lead to a wage-price spiral, according to Hatcher.
People's wages have been decreasing because pay raises haven't been enough to keep up with the rising cost of living. In March of this year, salaries only increased by 3.7%, but the price of things went up by 7%.
Tony Burke, the employment minister, is happy about the decision made by the commission. He thinks it's the best for workers.
He said there are many ways for companies to pay low wages. They want to fix this by the end of the year.
Burke didn't like it when people thought the pay raise meant interest rates might go up. He called it "dreadful".
He said there are many inflation pressures, some from other countries and some from neglecting our supply chains over time. Some people blame the workers, especially those who rely on the minimum wage and awards system.
Next Tuesday, the Reserve Bank will decide on interest rates. They will also assess the impact of the wages decision.
Investors thought there was only a 20% chance of a rate hike before Friday's announcement. The rate was expected to go up in August.
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The boss of Australia's Chamber of Commerce and Industry thinks pay rises will mean an extra $12.6bn in wage bills. It will be especially tough for small businesses. Plus, higher costs, such as for energy, will make things harder.
McKellar thinks the 0.5% superannuation guarantee increase from July 1 is a major problem for small business. He worries that this could cause long-lasting economic problems.
He said that today's decision would be a big shock for 260,000 small and family-owned businesses paying minimum and award wages.
Sally McManus, ACTU's secretary, stated that the increases would aid millions of workers to survive.
McManus stated that this rise is very important during the time of financial struggle.
Every year, big businesses try hard to cut wages for Australia's lowest-paid workers by at least $1,350.
Don't raise interest rates next week, Reserve Bank. It will destroy the recent raise that low-paid workers just received.
This year's wage increase is complicated. The Fair Work Commission made changes. They increased the base for setting the minimum wage.
The decision said that they would stop connecting the national minimum wage and the C14 classification wage rate. This connection has been there since 1997.
C14 rate is the smallest minimum wage for new employees. It was never meant for ongoing employees without an award or agreement. It's not a decent safety net for them.
Workers with C14 classification will receive an 8.6% increase. The total number of C14 workers is only 0.8% of the workforce. Therefore, the impact on inflation will be very small.
The commission said that because only a small number of workers will be affected by the national minimum wage, there won't be any major impact on the economy.
