Australia Fair Work Commission announces the highest rise in the minimum wage since 2006

Australia Fair Work Commission announces the highest rise in the minimum wage since 2006

Key Aspects:

  • The Fair Work Commission has declared an increase in the minimum wage of 5.2% or $40 per week to a national minimum wage of $812.60 a week or $21.38 an hour
  • The rise in wages will take effect on July 1
  • The award minimum wages will be raised by 4.6%, cut at a trade level
  • Inflation is most likely to rise to 7% by the end of 2022, stated Philip Lowe, Reserve Bank Governor, on Tuesday
  • The Annual Wage Review is one of the most efficient tools we have to generate the wage growth

Overview:

The Fair Work Commission has declared an increase in the minimum wage of 5.2% or $40 per week to a national minimum wage of $812.60 a week or $21.38 an hour. The rise in wage is comparatively more than the government had supported publicly for the minimum wage, a 5.1% rate of inflation which will take effect on July 1.

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Main Features:

The award minimum wages will be raised by 4.6%, with a minimum rise of $40 per week, which means that the workers on award minimum wages earning above $869.60 per week will receive a 4.6% raise and an individual who is making less will get a $40 where the 4.6%, cut in at a trade level.

The 2% of lowest paid workers alone are on the national minimum wage, whereas the rest will receive 23% minimum award rates as the low-paid are specifically vulnerable to rising inflation.

The award increases will also take effect on July 1, excluding those in hospitality, tourism, and aviation; the growth will take effect on October 1 because of the exceptional circumstances in these industries.

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Even though the latest inflation number will rise to 5.2% compared to the previous one, which was 5.1%, the workers might further face substantial rises in the inflation.

Inflation is likely to rise to 7% by the end of 2022, stated Philip Lowe, Reserve Bank Governor, on Tuesday.

The Fair Work Act requires the Commission to consider the competitiveness and performance of the national economy, including business competitiveness and viability, productivity, and employment growth.

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The Australian Council of Trade Unions (ACTU) agreed with the wage decision but suggested adapting to a better system to deliver the wage growth more accurately. ACTU Secretary Sally McManus mentioned, “This Annual Wage Review is one of the most efficient tools to generate the wage growth, but it affects one in four  workers who need wage growth across the economy.”

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He also stated that the system is currently failing as it cannot deliver the wage increases regardless of low unemployment, high profits, and high productivity. The working people have been facing severe consequences for the past ten years because of the inaction of the previous government.

Andrew McKellar, the chief executive of the Australian Chamber of Commerce and Industry (ACCI), said, “Even though a few businesses have strongly rebounded in the last few months, the reality is that we are experiencing and living in the multi-speed economy where many award dependant businesses were majorly disrupted by the pandemic and are just recovering.”

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