Nearly 2.75 million Australians will receive a 5.75% wage increase from 1 July after the Fair Work Commission issued its decision for minimum wage setters and wage givers.
The decision, released on Friday, indicates that the minimum wage will rise to about $22.60 an hour or $859.32 a week, based on the Fair Work Commission’s decision.
Workers’ salaries have fallen in real terms in recent years as salary increases have failed to keep pace with inflation. For the March quarter this year, wages rose 3.7%, less than the 7% annual rise in consumer prices.
The increase is about halfway between the 3.8% some business groups like AiGroup have called for, and the 7% that ACTU is seeking.
“We are confident that the increase we have identified will contribute modestly to total wage growth in 2023-24,” said Adam Hatcher, chair of the Fair Work Commission.
The 5.2% increase last year affected one in four workers whose wages accounted for 11% of the national total. Hatcher said that increase, however, accounted for less than 10% of total wage growth and did not contribute to the wage-price spiral.
The Reserve Bank will take into account the increase today when its board of directors meets to decide on interest rates next Tuesday. Prior to today’s announcement, investors were betting there was a one in five chance of a further 25 basis point hike to 4.1% even though they now see another hike as if it were all but certain in August.
Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry, said the wage increase would add $12.6 billion to the annual wage bill. It would hurt small businesses, in particular, and add to rising costs like energy.
More is coming …