The decision to raise the minimum wage by 5.2 percent will set a standard for wage increases for all workers and fuel inflation, the business community warns.
Key points:
- Business groups say a 5.2% increase in the minimum wage will reach all workers
- The Australian Industry Group warns it will fuel inflation and cost jobs
- Unions say rise in inflation will slow down real wage cuts
The National Wage Authority determined yesterday that the minimum wage should be increased by $ 1.05 an hour, with a slightly lower pay rise for people with premium rates.
And while it will be welcome news for the recipients, the head of the Australian Industry Group, Innes Willox, has warned that the decision will fall on the salaries of all workers.
“It’s going to run up, that’s the broader topic,” Willox said.
“Those with the minimum wage account for only 1.6 percent of the total workforce. Those with the lowest award rates, the lowest award rates, account for about 23 percent of the workforce.”
“And then it flows upwards, it becomes the standard in negotiations, it becomes the standard expectation.
“It has consequences directly through the workforce, and that’s probably the deepest concern for the business community.”
The chairman of the Fair Labor Commission (FWC), Iain Ross, said yesterday that his decision had taken into account the demands of business groups for a lower pay rise, which would mean a pay cut in real terms.
Ross said the 5.2% increase in the FWC, slightly above the rate of inflation, would not have a “significantly negative effect” on the economy.
Mr. Willox disagrees.
“[Businesses] they have to make decisions about the impact of these costs, so in the end it is up to the consumers to pay the bill, ”he said.
“The concern is that this will add fuel to the fire of inflation that we are seeing going through the economy right now.”
He also said small businesses in particular told the Australian Industry Group that the decision would affect their procurement options and results.
Unions say the pay rise will lag behind inflation and not feed it
Australian Trade Union Council chairwoman Sally McManus said the number one problem she was hearing from employers was that they could not find enough staff.
“They’ve already had to raise their salaries a lot to keep the staff they have,” Ms. McManus said.
“It simply came to our notice then.
“Those who say they can’t afford it, I don’t think they’re direct with us.”
Ms McManus said that with the 7% inflation forecast for Christmas, yesterday’s decision was still a pay cut in real terms and therefore would not increase inflation.