Changes to WA’s minimum wage leave few satisfied

Western Australia’s Industrial Relations Commission this morning announced a 2.75 per cent increase to the state minimum wage, provoking criticisms from unions and business groups.

The increase will bring the weekly pay of more than 300,000 workers across the state to $746.90.

In May, the federal government had announced a 3 per cent increase to the national minimum wage, bringing it to $740.80 per week.

In making the decision, the commission noted that WA’s minimum wage has often been higher than the national minimum wage.

However, with a less buoyant state economy than in past years, the difference between the state and national minimum wage fell to $6.10 per week.

Citing spare capacity in the economy as well as an overall increased cost of living, the commission said there was need for a moderate response by way of a wage increase.

“Last year we noted that WA was likely to have reached the bottom of the economic cycle of the last few years, which had seen a reversal of the fortunes that were experienced by the state during the resources and infrastructure investment boom," the WAIRC said.

“The WA economy is now in the process of improving from that trough and there are signs of growth.

“However, WA’s economy compares unfavourably with the rest of the national economy, and in that context, the national economy also has its challenges.”

Responding to the news, both union groups and industry leaders expressed frustration with the decision.

Speaking on behalf of UnionsWA, Meredith Hammat said it was disappointing that the increase was lower than the national minimum wage increase of 3 per cent, and that the new rate wouldn’t go far enough to relieve financial pressures facing working families.

“Many workers have had their working hours reduced and one in 10 people are now actively seeking increased hours of work,” she said.

“For those on low pay in WA, essential costs of living consume much of their wages.

“Growth in wages is an important stimulus to our local economy because the lowest paid by necessity spend locally all they earn.”

In the lead up to the decision, UnionsWA and WA Council of Social Service (WACOSS) had advocated for a 6 per cent increase in their submissions to the commission.

In a statement, WACOSS’s Chris Twomey said that the 2.75 per cent increase would not be enough to address the persistent hardship facing low-paid wage earners.

“We have seen the impacts of insufficient incomes in the growing rates of people living in food insecurity, where they are regularly having to skip meals or can’t put food on the table for every meal,” he said.

“From our own research into the cost of living, we know that low income households are spending significantly less than the WA average in areas like recreation, health and education, all of which impact on their quality of life and personal wellbeing.

“While lower than what is needed, both the national and state minimum wage increases demonstrate a recognition that living costs are growing.”

While workers groups were disappointed with the decision, so too were business groups, with the Chamber of Commerce and Industry of WA having called for an increase of no more than 1.4 per cent.

“WA’s domestic economy remains fragile, slowed down by falling business investment, flat retail trade and the second highest unemployment rate in the country,” CCI chief executive Chris Rodwell said.

“Small businesses do not have a high capacity to absorb increases in operating costs or to respond to weakening demand and generally have less capacity to adjust to the adverse economic conditions WA has experienced in recent years.”

Despite this, Mr Rodwell said he welcomed the WAIRC’s recognition that WA was experiencing softer economic conditions compared to the eastern states.

“We also welcome the narrowing of the minimum wage gap for workers under the national wage system compared to the stage wage system from $7.70 to $6.10," he said.

“CCI respects the independence of the WAIRC, and while the decision is greater than CCI had advocated, we believe that the WAIRC strongly considered CCI’s arguments made on behalf of our members.”