Fair Work Commission increases minimum wage by 5.75 per cent

Australia’s lowest paid workers have received the biggest wage increase since 1990, even if it is well below inflation – meaning the poor will decline.

The Fair Work Commission on Friday granted a 5.75 per cent increase in the minimum wage and national rewards, which will affect the wages of 2.67 million Australians – or one in four workers.

The annual wage review decision directly affects 180,000 minimum wage workers in hospitality, tourism and aviation, but affects many more workers on national awards.

The national minimum wage will increase by $46.72 a week from July 1 to $859.32.

Adam Hatcher, chairman of the Fair Work Commission, said women workers in particular were suffering from high inflation and a high cost of living, but noted wage pressures to consider.

“The current combination of economic conditions, namely low unemployment, falling real wages and high inflation, is very unusual and presents a particular challenge in this year’s report,” he said.

The latest increase in the minimum wage was the largest annual increase since a 9.2 percent increase was awarded in 1990 over two six-month blocks.

But the minimum wage will rise much less from July 1 than April’s monthly inflation rate of 6.8 percent.

The 5.75 percent increase is better than last year’s 5.2 percent increase, but only slightly more than the 5.7 percent increase in 2006 during the mining boom.

The Australian Council of Trade Unions had pushed for a 7 per cent increase so that the minimum wage increase in the March quarter would be in line with inflation.

The monthly inflation measure for April showed an increase from 6.3 percent to 6.8 percent, the Australian Bureau of Statistics announced this week.

Employer groups had called for more restraint, with the Australian Chamber of Commerce and Industry advocating a 3.5 per cent increase.

Last year’s 5.2 percent increase was slightly above inflation and was the most generous increase since the old Australian Fair Pay Commission awarded a 5.7 percent increase in 2006 during the mining boom.

Prime Minister Anthony Albanese’s Labor government had called on the Fair Work Commission to authorize an increase in the minimum wage so that Australia’s lowest paid would not decline during a cost-of-living crisis.

But Justice Hatcher, who was only appointed in February by Secretary of Labor Tony Burke, has not heeded that call.