The Fair Work Commission has announced a 2.5 per cent increase to the national minimum wage to start from July 1, prompting fears it could worsen an already tough job market.
The Fair Work Commission has announced a 2.5 per cent increase to the national minimum wage to start from July 1, prompting fears it could worsen an already tough job market.
The rise will mean the full-time minimum wage will now be $656.90 per week, up from $640.90 this financial year.
Hourly pay is up 42 cents to $17.29.
It comes despite a soft labor market, with unemployment up 0.1 per cent nationally to 6.2 per cent in April, according to the Australian Bureau of Statistics.
That means almost 770,000 Australians were unemployed in the month.
Australian Industry Group chief executive Innes Willox said although it would benefit workers with more secure jobs, the impact of the decision would not be the same for all employees.
“There is the clear risk that the increase will operate against the interests of those looking for work, or for more hours of work than currently on offer, and those whose jobs are less secure,” he said.
“While the costs of lower-wage employees will rise to the detriment of people trying to enter or extend their participation in the workforce, the increase in minimum wage rates of 2.5 per cent is only slightly higher than the pace of private sector wage increases in the broader labour market and should not place minimum wage employees at a significant relative disadvantage in the labour market.”
Australian Retailers Association executive director Russell Zimmerman underlined the impacts on youth unemployment.
“Retailers and young Australians have been reliant on pay rates to enable retail to bring on low-skilled young staff and increase their skill levels, reducing youth unemployment,” Mr Zimmerman said.
“Many small to medium enterprise retailers are reliant on a minimum wage workforce, and the announcement today to increase wages during this time of low consumer confidence and low growth will sadly result in further job losses and business closures – a very distressing truth for retailers."
Mr Willox was also concerned about the impact on business.
“Today’s wage decision will further increase costs for many of the businesses in the non-mining sector whose allocation of funds to investment and innovation are so vital for a successful and sustainable transition of the broader economy,” he said.
Earlier this week, St George Bank found that the March quarter had been better for business profitability than the first half of this financial year, although the belt has been substantially tightened.
“For the year to the March quarter company operating profits fell 7.5 per cent,” the bank said.
“Gross company operating profits rose 0.2 per cent in the March quarter, following three consecutive quarters of declines.
“Wages and salaries retreated 0.1 per cent in the March quarter, the first quarterly decline since the aftermath of the GFC.
“For the year to the March quarter, wages and salaries rose 1.5 per cent, suggesting very weak real wages growth and limiting the likelihood that consumers will meaningfully lift spending.”
