The wage rate rise will nudge the small business community and should effectively sober up the scenario of exploitation of international students and back-packers. It remains to be seen, though, whether minimum rates are effectively implemented in some of the biggest companies in the country writes Nidhi Mehta.
Melbourne, May 31:The Fair Work Commission on Monday lifted the national minimum wage by 2.4 per cent for Australia’s lowest paid workers.
The current minimum of $656.90 per week will go up to $672.70 per week, following Fair Work Ombudsman’s annual minimum wage decision.
This decision is on a 12 months plan and will take effect from July 1 this year.
Although, unions were seeking a $30 per week increase, while businesses were campaigning for an increase up to $10 per week – the Ombudsman’s decision is seen as middle ground with an increase of $15.80 per week.
Earlier, employer and industry groups had warned that unions’ wage claims were unaffordable and would force job cuts.
The Australian Hotels Association was seeking a minimum wage freeze or a maximum of $7.90 / 1.2 per cent rise per week.
Australian Chamber of Commerce and Industry, was similarly urging no greater than 1.2 per cent per week, given more than more than 250,000 young people were jobless.
“We need to make it easy for businesses to hire staff.
“Wage growth across the economy remains at record lows, indicating that employers lack the capacity to pay large increases,” ACCI had said.
This rise from July 1, follows from a rise of the current figure of $17.29 per hour to $17.70 per hour.
The increase will undoubtedly unease some pressure off almost 2 million segment of people, who are on the minimum wage bracket.
In 2015, Fair Work raised the minimum wage by 2.5 percent rise to $656.90, following on from a 3 percent increase in 2014.The Fair Work Commission’s decision on wage rates affects one in five Australian workers, who are governed by the minimum rates of pay and working conditions.
“The level of increase we have decided upon will not lead to inflationary pressure and is highly unlikely to have any negative impact on employment,” the FWC said.
“It will, however, mean a modest improvement in the real wages for those employees who are reliant on the NMW and modern award minimum wages.”
While Fair Work found that the wages rate rise would not add to any inflationary pressure in the Australian economy, it also added that Australian firms would not lose out competition in international markets.
Adding impetus for women in the work force, the commission said that “Women continue to be over-represented among the award reliant and the low paid.
“It follows, and we accept, that increases in minimum wages can provide some assistance in addressing the gender pay gap.”
The Australian Council of Trade Unions (ACTU) confirmed that 57.5 per cent of the work force is women and had argued earlier this year, that shrinking wages in real terms, were increasing inequality and creating a class of “working poor” in Australia.
The wage rate rise will also nudge the small business community and effectively sober up the scenario of exploitation of international students and back-packers.
Those not governed by minimum wage rates are effectively covered by ‘enterprise bargaining’ where they should end up being better off in comparison to the minimum brackets of any industry.
It remains to be seen, though, whether minimum rates are effectively implemented in some of the biggest companies in the country.
This comes at a time when earlier this month, a report by Fairfax revealed that Australia’s three largest employees – Woolworths, McDonald’s and Coles – were all likely paying tens of thousands of workers, below the award through questionable deals with the union.
Fair Work Commission in a ruling, found some Coles workers were being significantly underpaid due to a deal between the company and the union.
Coles also did not pass the ‘better-off test’ such that workers are better off in comparison with minimum Work Fair structure.
With that, Woolworths is now facing the prospect of a pay overhaul for its 100,000 supermarket staff after it was revealed that it had an almost identical agreement with its work force.