How will Fair Work Commission wage rise affect Australians? | Lismore City News

The Fair Work Commission delivered it’s decision to raise minimum and award wages and tackle rising cost of living pressure with new pay rates from July 1.

The commission raised wages by 5.75 per cent for minimum and award wages and added a change in minimum wage classifications that will attract an even larger increase.

This means the lowest paid 0.7 per cent of Australians will actually get an 8.6 per cent increase on July 1.

But Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the decision was a “hammer blow” for the 260,000 small and family-owned businesses that pay minimum and award wages.

FWC considered the “significant weight” inflation had on employees who relied on modern award income.

“Inflation is reducing the real value of these employees’ incomes and causing households financial stress,” the commission said.

Australian Council of Trade Unions secretary Sally McManus said this is an “absolutely essential increase for all people in Australia that are struggling so hard at the moment just to survive”.

Working Australians had borne the brunt of current economic circumstances in their budgets from interest rate rises and inflation, she said.

It’s the rising price of rent, groceries and utility costs that are affecting people and they have no choice but to spend money on these expenses, Ms McManus said.

“This is a welcome increase for those workers,” she said.

FWC found the diminishing value of real wages was “causing a decline in living standards, financial pressure on households and, for some household types, a likely incapacity to meet basic budgetary needs”.

While the increase is higher than the four per cent recommended by the Australian Chamber of Commerce and Industry (ACCI) it “will not maintain the real value of modern award minimum wages,” according to FWC.

Nor will it reverse the reduction in real value that’s happened over recent years, it said.

Businesses in the accommodation, food, construction, manufacturing and retail sectors had experienced falling profits over the past two years, ACCI’s Mr McKellar said

“The reality is many of the small businesses and family firms in these industries will be unable to absorb this extra cost without raising prices,” he said.

“A 5.75 per cent increase will make the job of the Reserve Bank more difficult to control ongoing inflationary pressures, inflicting pain on families and small business when they are already down to the wire,” he said.

FWC emphasised that the direct effect of the wage review on the Australian employee workforce was limited.

The national minimum wage only applies to 0.7 per cent of the workforce, which is a “very small proportion”, the commission said.

“Because of the negligible proportion of the workforce to which the national minimum wage applies, this outcome will not have discernible macroeconomic effects,” the commission said.

But more than one in five Australians are paid minimum wage rates in modern awards and would see the wage rise.

The FWC panel also noted the workers who relied on the modern award minimum wage rates worked unconventional hours.

“They predominantly work part-time hours, are predominantly female, and almost half are casual employees,” it said.

And they’re also much more likely to be low paid, paid junior rates and work for a small business, it said.