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🗞️National Minimum Wage Rises to $24.10 Per Hour in Australia

🗞️National Minimum Wage Rises to $24.10 Per Hour in Australia

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From July 1, the Fair Work Commission will raise Australia's minimum wage and award wages by 3.75 percent. The national minimum wage will rise to $24.10 per hour and $915.91 per week for full-time, 38-hour workers. This increase results in a $33 weekly raise for 2.6 million workers, constituting 20.7% of the national workforce.

The Background :

The Annual Wage Review, mandated by section 285 of the Fair Work Act 2009, requires the Fair Work Commission to assess the National Minimum Wage order and modern award minimum wages. The National Minimum Wage establishes a minimum pay rate for employees who are not under modern awards or enterprise agreements. The Commission must consider the amount of the National Minimum Wage when setting modern award rates of pay.

The Review:

In light of rising expenses, workforce participation, and living standards, the FWC has chosen to raise the minimum wage and award wages. The decision is largely influenced by the challenges of increasing living costs faced by modern workers reliant on awards, particularly those from low-income households, despite reduced inflation.

ACTU

The ACTU supports the Fair Work Commission's 3.75% wage increase for 2.6 million workers, resulting in a $33.11 weekly wage increase. However, the ACTU is disappointed that the Commission has not provided interim pay rises for workers in key feminised occupations, a crucial first step in valuing their work.

"Any day working people get a pay rise is a good day. This decision allows people to keep up with inflation and have a small real wage increase. If employers got their way, Australian workers would’ve seen a significant real wage cut while facing cost-of-living pressures." ACTU Secretary Sally McManus said

ACCI

The Australian Chamber of Commerce and Industry (ACCI) has endorsed the Fair Work Commission's decision to raise national and modern award minimum wages by 3.75 per cent. Although slightly higher than current inflation and surpassing the Reserve Bank's target range, the decision does not pose a major inflation risk if productivity is taken into account.

“It is inevitable that businesses will need to pass increased costs through to consumers. " ACCI chief executive officer Andrew McKellar said.

Australia Institute Center for Future Work

Research from the Centre for Future Work shows the real value of most Award wages has lagged behind inflation since 2021 – losing about 4% of purchasing power in that time. It also found an increase of between 5% and 10% was required to keep up with current inflation and undo that past damage.

“Today’s decision, in light of current inflation forecasts, means real wages for Award-covered workers will not change much in the year ahead,” said Dr Fiona MacDonald Policy Director, Industrial and Social at the Centre for Future Work.

Why does this matter for the overall economy?

Higher wages may boost consumer spending, but excessive price hikes by businesses could hinder economic growth. Policymakers must find a balance between ensuring fair wages for workers and promoting sustainable business practices to maintain economic stability.

Our Take :

The key to long-term economic growth and stability on this matter is striking this balance. It is imperative that policymakers closely monitor the situation and make necessary adjustments to avoid any unfavourable effects on the economy.

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