National minimum wage increase


17th June, 2021

Fair Work increases minimum wage by 2.5 percent

In addition to recent increases to the minimum wage, a further 2.5 percent was announced yesterday despite opposition from the Federal Government.

The Fair Work Commission has announced an additional 2.5 percent to be added to the minimum wage, raising the hourly rate to $20.33 and positively impacting a quarter of all workers.

The increase went ahead despite being opposed by the Federal Government, but the unions have expressed disappointment that the Fair Work Commission opted to delay the increase for aviation, fitness, tourism and parts of the retail and events sectors until 1 November, as well as majority of retail until 1 September.

“This wage increase has come about because of unions, the Morrison Government and big business wanted pay cuts or freezes,” said Australian Council of Trade Unions secretary, Sally McManus.

“However, it is extremely disappointing that the Commission has delayed increases for any workers – but especially those who have worked throughout the pandemic and whose employers have posted record profits.”

With wage growth having remained stagnant for most of the past decade, increases to the minimum wage will make an impact for the most vulnerable workers, but McManus went one step further, singling out the government and big business as taking part in ‘wage suppression’.

“Wage suppression in our country needs to stop. Suppressing wages hurts the economic recovery and it hurts working people, their families and communities,” she said.

“There can be no economic recovery without a wages recovery.”

The sentiment was echoed in a statement from the deputy leader of the Australian Labor Party, Richard Marles and shadow minister for industrial relations, Tony Burke.

“This is a Government that has given Australian workers eight long years of stagnant wages. This is a Government which has budgeted for a real cut to wages and is refusing to do anything to fix it.

“This is a Government which voted against making wage theft a crime,” the statement reads.

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Can employers shoulder the load?

While giving one in four Australian workers a pay rise sounds like a positive thing, it’s unclear whether or not employers will be able to bear the burden on another increase — especially given last year’s announced increases only just finished rolling out in February this year.

Innes Willox, chief executive of the Ai Group, describes the latest increase as ‘tempting fate’ given the unpredictable economic conditions businesses find themselves in.

Businesses are also contending with an impending increase to the Superannuation Guarantee.

“A 2.5 percent increase is too much in the current environment, particularly when employers are also faced with a 0.5 percentage point increase in the Superannuation Guarantee on 1 July and low paid employees have benefitted from personal income tax changes equivalent to a 1.6 percent increase in pre-tax income,” said Willox.

“When these factors are taken into account, the remuneration increase totals 4.6 percent for an employee on the national minimum wage.

“A 2.5 percent minimum wage increase is unwarranted when the latest inflation figure is 1.1 percent and with wages across the economy only rising at an average rate of 1.5 percent.”