Minimum wage to rise 3.75%
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The news: The Fair Work Commission has increased the national minimum wage and all modern award minimum wage rates by 3.75%, effective from 1 July.
The numbers: The commission said around 20.7% of the Australian workforce, or about 2.6 million employees, are paid in accordance with minimum wage rates in modern awards.
It noted that employees who rely on modern award minimum wage rates mostly work part-time hours, are predominantly women, and almost half are casual employees, meaning that the total wages cost of the minimum wage workforce constitutes less than 11% of the national "wage bill".
The increase is broadly in line with forecast wages growth across the economy in 2024, and the commission considers the change consistent with the forecast return of the inflation rate to below 3% in 2025.
The context: The Fair Work Commission said that in conducting its Annual Wage Review, it examined relative living standards, the needs of the low paid, workforce participation, the performance and competitiveness of the national economy, and the need to achieve gender equality.
For this year's review, the commission said its "primary consideration" was the cost-of-living pressures that face minimum wage employees. It noted that minimum wages remained lower than they were five years ago in real terms, despite a 5.75% uplift last year.
However, it decided not to increase award wages by "any amount significantly above the inflation rate" as labour productivity is no higher than it was four years ago and productivity has only recently returned to positive territory. The commission also factored the benefits of upcoming Stage 3 tax cuts and federal budget cost-of-living measures, which are projected to increase real household disposable incomes over the next 12 months.
Meanwhile, the Fair Work Commission will establish a program for the timely resolution of gender undervaluation issues relating to certain workers, including early childhood education and care workers, disability home care workers and other social and community service workers, dental assistants, medical technicians, psychologists and other health professionals, and pharmacists.
The source: Fair Work Commission announcement
