Minimum wage earners win $26 pay rise

Australia’s minimum wage earners will be given an extra $26 per week from July 1

Minimum wage earners win $26 pay rise
Minimum wage earners win $26 pay rise
June 3, 2010

Australia’s minimum wage earners will be given an extra $26 per week from July 1, following today’s annual wage review by the Federal Government.

The decision by Fair Work Australia will see the national minimum wage increase to $569.90 per week, $15 per hour, for a standard 38-hour working week.

The increase applies to minimum wages for junior employees, employees to whom training arrangements apply and employees with disability.

According to the tribunal, the Australian economy has performed "much better than expected" since March 2008.

"During that time, productivity, prices and real earnings have grown but minimum wages have not. There is a strong case for a rise in minimum wages to provide a fair and relevant safety net, protect the relative living standards of award-reliant employees and assist the low paid to meet their needs," it says.

The tribunal claims the increase can be awarded without threatening business viability, employment growth or adding to inflation.

"We have concluded that a significant increase in minimum wages is warranted."

Today’s rise falls just $1 shy of the Australian Council of Trade Unions minimum wage submission.


The Australian Industry Group has this afternoon spoken out against the government’s decision, arguing the wage increase is "out of sync" with
an already
struggling economy.

"The $26 per week increase comes at a time when employers are still dealing with the effects of the downturn, global conditions are uncertain and consumer confidence is weakening," Chief Executive Heather Ridout says.

"It appears the Tribunal has awarded a 'catch-up' increase but this approach is risky," she says.

"Timing is everything and there is a risk that this increase will slow the pace of job creation and that for many households the benefits of higher wage rates will be offset by a reduction in employment opportunities."

In addition to paying the minimum wage increase, thousands of employers will be required from July 1 to pay increased wage rates, penalties and loadings under modern awards, according to Ridout.

"Moreover, award modernisation may prove to be far more costly than most employers had thought given doubts that have arisen about whether new entitlements in modern awards can be absorbed into over-award payments," she says.

"The increase in wages will impose higher costs on employers who, in addition to the increase in wages, will have to meet higher payroll tax, superannuation guarantee and workers’ compensation liabilities."

As a result of the extra costs, Ridout says the increase in wages of $26 a week will ultimately cost employers over $31 per week.

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