Minimum wage rises by $13 a week

The minimum wage in Australia will rise from July 1 to $753.80 a week, or $19.84 an hour. That’s the equivalent of a $13 a week increase.

However the impact of the pandemic on the hospitality, retail, tourism and accommodation industries means the increase will not come into play in these sectors until 1 February 2021.

The Fair Work Commission decision comes as the Government prioritises keeping Aussies in jobs.

FWC president Iain Ross said “The Australian economy is going through a significant downturn and is almost certain to enter a recession.

“The shock to the labour market has been unprecedented… and the form and shape of the pathway to recovery is uncertain.”

Ross said the approaching cliff drop of Government wage subsidy JobKeeper, as well as the risk of a second wave of COVID-19 cases as the economy slowly opens up, helped to push the majority of panel members to come to the decision.

The Franchise Council of Australia has welcomed the panel’s rejection of the push by the ACTU to increase the minimum wage by 4 per cent at a time many industry sectors are at a critically vulnerable point in their recovery.

FCA CEO Mary Aldred said it was encouraging the most heavily impacted sectors including tourism, retail trade and food services, would have longer to implement the 1.75 per cent increase.

“Retail and food services are fighting for their business survival right now, which the Commission has acknowledged.

“It is vitally important that businesses in these sectors are given their best shot at making it through the next critical period, and that employers are not deterred from putting on job seekers through excessive wage increases. The implementation date next month will be an additional burden for businesses struggling to keep their head above water right now.”

National Retail Association chief executive Dominique Lamb said the decision was like Groundhog Day – retailers would wake up in February to find their concerns have once again been ignored, and that they are in a “continuing nightmare”.

“They will wake up to the recurring problem of widespread failure of retail businesses, which will be compounded by wage increases that many simply cannot afford,” Lamb said.

“The bottom line is that businesses cannot pay money that they do not have and will likely be hit with two wage increases in February and July 2021.”

ACTU Secretary Sally McManus said the wage rise was a modest increase, and that the union was disappointed some awards wouldn’t see increases until November or February next year.

“However it is clear in the decision that this panel of experts recognise that cutting wages in the middle of this crisis would be a disaster for working people and the economy and they have rejected the arguments put by some employers to effectively cut wages by freezing the minimum wage,” McManus said.

“Just about every cent a worker on minimum wages receives, they spend. This is money circulating to local businesses. It is the fastest and most effective form of stimulus we can have.”

According to the ACTU, almost 60 per cent of the economy relies on domestic spending – which is likely to go up as international borders remain closed.

 “This is why we must not have wage cuts. Wage cuts are confidence killers which hurts business and job creation,” McManus said.
Authors: Dean Blake, Sarah Stowe.