The Fair Work Commission has announced a 4.75% increase to award wages for approximately 2.7 million workers, with an additional 6% rise for about 100,000 of the lowest-paid employees, effective from July. The decision, delivered on Tuesday, aims to address the impact of inflation driven by the Middle East conflict.
Commission President Adam Hatcher described the ruling as 'particularly challenging' due to global oil price surges. He noted that a 'structural adjustment' would lift the minimum hourly rate from $24.95 to $26.44, bringing the weekly wage for a 38-hour week from $948 to just under $1005. Last year's increase was 3.5%, while inflation stood at 4.2% in April.
Treasurer Jim Chalmers welcomed the decision, stating it 'strikes a very effective balance' and that minimum wages have risen by 30% since Labor came to power in May 2022. However, David Alexander of the Australian Chamber of Commerce and Industry warned that for some small businesses, 'this will be too much to bear', particularly in retail, hospitality, and accommodation.
Economists have raised concerns about inflationary pressures, with AMP's My Bui predicting a potential rate hike in November to 4.85%. The Reserve Bank of Australia forecasts inflation at 4.8% by June, nearly double its target. Sally McManus of the ACTU defended the rise, reminding that workers are also customers whose spending supports businesses.
