Minimum wage earners can expect a boost following a decision by the Fair Work Commission to increase their wages by 2.5%. This will see full-time workers take home about $20.33 an hour, or $772.60 a week. It translates into an increment of $18.80 a week, impacting as many as 2.5 million workers and costing as much as $3.6 billion.
This is an improvement on last year’s review that saw the minimum wage increase by just 1.75%. It is also higher than the 1.1% hike that many business lobbies campaigned for and lower than the 3.5% that unions hoped for. Business lobbies pegged their recommendation on the prevailing inflation rate and hoped to minimise this expense for smaller businesses that were struggling, particularly in the retail, food, and hospitality sectors.
This year’s hike has been attributed to the economy performing and recovering better than expected. But it is not all good news for everyone. These changes are traditionally put into action in July. Many sectors will have to wait till much later to see the impact on their payslips. Those in the tourism and hospitality, aviation, and fitness industries can expect the increment to apply from November 1st. These industries will suffer delays due to their slower pace of recovery from the pandemic.
Retail workers will be getting their pay increase from September. This move is expected to raise tensions with trade unions that have been demanding profitable companies quickly effect this wage increase. According to Australian Council of Trade Unions secretary, Sally McManus, supermarket workers had worked hard resulting in record profits for employers. She termed the delay in their salary increases as wrong and said the increase was not going to be enough to keep up with the cost of living.
This is however not the first time that increments have been delayed. 2020’s minimum wage increment applicable to fast-food workers was delayed till February of this year. It means that for some businesses covered by the award that is to start in July 2021, they will have to suffer two minimum wage increases within the space of 6 months.
Fair Work Commission’s president, Justice Iain Ross, noted that though the economy had performed better than expected, there was a need to also factor in the risk of further virus outbreaks, the slow pace of vaccine rollout, and possible challenges with Australia’s overseas trading partners. He also highlighted the soon to be effected 0.5% increase in minimum superannuation rate as part of the reason behind the staggered approach to increments for certain industries.