Fair Work Commission rules Australia’s lowest-paid workers to receive $15.80 a week minimum wage rise

June 1, 201610:16 am399 views

Australia’s 1.8 million lowest-paid workers will be awarded a minimum wage rise of 2.4 per cent – an extra $15.80 a week.

The Fair Work Commission on Tuesday ruled that the national minimum wage will become $17.70 an hour, or $672.70 a week, from July 1.

Carmen, a shopping centre cleaner, says an extra $15 a week is "not going to change much".Carmen, a shopping centre cleaner, says an extra $15 a week is “not going to change much”. Photo: Justin McManus

The decision has disappointed trade unions, which had been calling for a $30-a-week increase to halt what they called an alarming slide in living standards of the nation’s lowest-paid.

Australia’s influential employer groups hoping for a smaller lift of less than 2 per cent were also angered by the above-inflation pay rise, warning it could force job cuts.

The commission’s full bench, headed by president Iain Ross, said Australia’s “robust” economic climate provided a good opportunity to help employee households that had “low or very low disposable incomes”.

Retailers called the $15.80 minimum wage rise "unimaginable" and said it could cause further damage to retailers who ...Retailers called the $15.80 minimum wage rise “unimaginable” and said it could cause further damage to retailers who were struggling to get by. Photo: Michele Mossop

“The general economic climate is robust, with some continued improvement in productivity and historically low levels of inflation and wages growth,” Justice Ross said.

“The level of increase we have decided upon will not lead to inflationary pressure and is highly unlikely to have any measurable negative impact on employment … it will, however, mean a modest improvement in the real wages for those employees who are reliant on the [national minimum wage] and modern award minimum wages.”

Justice Ross said women were over-represented among the country’s lowest-paid workers who relied on award rates, and the new increase would “provide some assistance in addressing the gender pay gap”.

From July, the increase will flow directly to more than 800,000 workers, and will also lift the pay packets of another 1.1 million Australians whose wages are set by modern awards – the pay and conditions safety nets for different occupations.

An extra $15 a week is “not going change much”, said Carmen, a low-paid shopping centre cleaner from Melbourne’s west.

For working three shifts of more than eight hours a week, with one that attracts penalty rates, the 50-year-old clears about $400.

“It’s just enough –  just enough to cover my bills and my groceries,” she said.

“There is never anything left over.”

Some of the nation’s biggest business lobbies were highly critical of Fair Work’s decision, saying the increase was “out of step” and would put upward pressure on wages.

The Australian Industry Group said the 2.4 per cent rise would be a major impost on business at a time when the economic environment was “difficult, risky and uncertain”.

“There is a clear risk that the decision will be to the particular detriment of people currently out of work and part-time employees hoping to secure additional hours,” Ai Group chief executive Innes Willox said.

“With jobs growth slowing and unemployment and underemployment remaining at unsatisfactory levels, a more modest wage increase would have reduced the risks of adverse employment outcomes.”

Australian retailers called Tuesday’s minimum wage rise “unimaginable”, warning it could cause devastating damage to retailers struggling to get by.

The Australian Retailers Association, which had called for an increase of no more than $7.90, said the ruling meant the pay rate for shop assistants would increase to $19.44 an hour.

“Retailers and young Australians have been reliant on pay rates to enable retail to bring on low-skilled young staff and increase their skill levels, reducing youth unemployment,” association executive director Russell Zimmerman said.

“Many small to medium enterprise retailers are reliant on a minimum wage workforce, and the announcement today to increase wages during this time of low consumer confidence and low growth will sadly result in further job losses and business closures – a very distressing truth for retailers.”

The Australian Council of Trade Unions said the minimum wage rise was “not enough” to close the gap between average and minimum wage earners.

“We are disappointed in the missed opportunity to truly narrow the gap between the minimum wage and average earnings – now would have been the ideal time to lift the minimum wage,” ACTU secretary Dave Oliver said.

Mr Oliver also attacked the Turnbull government for failing to strongly advocate for a rise in the minimum wage.

Labor leader Bill Shorten said he believed the Fair Work Commission has “got the balance right”.

“I think the minimum wage is one of the important protections of Australian society,” he said. “I don’t want to go down the American path where you have people on day hire, picked up in mini buses out the front of fast food stores.”

In 2015, the Fair Work Commission awarded a 2.5 per cent boost to the minimum wage, which translated to an increase of $16 a week.


news source: theage.com.au/business/workplace-relations/fair-work-commission-rules-australias-lowestpaid-workers-to-receive-1580-a-week-minimum-wage-rise-20160531-gp84tp#ixzz4AI2qpyxX

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