The Fair Work Commission has announced a $13-a-week increase to the minimum wage, boosting the pay packets of 2.2 million Australians.
However, the increases will be staggered to minimise the impact on businesses affected by the pandemic.
Fair Work Commission announces $13 increase to minimum wage
The increase works out to a rise of 1.75 percent and takes the minimum wage to $753.80 a week or $19.84 an hour.
Workers paid the minimum wage will receive a pay rise.
Additionally, those who have their pay set by awards that rise in-line with the minimum wage will also benefit.
The Commission decided to stagger the increase, with essential service workers benefiting immediately and industries hardest-hit by the coronavirus crisis waiting until next year.
For example, healthcare, social assistance, teachers and childcare workers will receive the increase from 1 July.
Meanwhile, construction, manufacturing and other industries will receive the increase from 1 September.
Finally, accommodation, food services, arts, recreation, aviation, retail and tourism will receive the increase from 1 February.
25 percent of award-reliant workers will benefit in the first wave, with 40 percent of workers in the second, and more than one-third in the final wave.
Unions wanted 4 percent increase
Unions wanted a 4 percent rise, or $30 a week more, however, employer groups wanted a freeze or to delay any pay rise until 1 January.
Commission president, Justice Iain Ross, said the minimum wage panel had to weigh “sharply polarised” demands.
He said the Commission understood the economy is in a “significant downturn”.
Additionally, it took into account the current “unprecedented” shock to the labour market.
Therefore, he said the Commission took a “cautious approach” to both the timing and size of the wage rise.
However, Mr Ross said without a pay increase, low-income households risk living in poverty.
Unions and employer groups disappointed
The secretary of the Australian Council of Trade Unions, Sally McManus, described the increase as “very modest”.
Additionally she said “it is disappointing that several awards will not see any increase until November or February”.
“However, it is clear in the decision that this panel of experts recognise that cutting wages in the middle of this crisis would be a disaster for working people and the economy.
“And they have rejected the arguments put by some employers to effectively cut wages by freezing the minimum wage.”
Meanwhile, AiGroup chief executive, Innes Willox, said the wage increase will adversely impact hiring and firing decisions of businesses.
He described the decision as “risky given that the economy is in recession, many businesses are struggling to survive, and unemployment and underemployment have increased sharply”.
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