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Minimum Wages to Rise

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By Published On: June 4, 20240 Comments

The FWC has determined a 3.75% increase for minimum wage, a move which has retailers concerned in light of increasing costs.

The Fair Work Commission has decided on a 3.75 percent increase to both the modern award minimum wages and the National Minimum Wage. The new National Minimum Wage will be $915.90 per week or $24.10 per hour.

The Australian Retailers Association (ARA) say the decision, in addition to the scheduled 0.5 percent increase in Superannuation Guarantee Rate, means the increase in wages for business will actually total 4.25 percent.

ARA CEO Paul Zahra said whilst it is important that wages keep pace with inflation, it’s a delicate balancing act to keep businesses running sustainably and today’s announcement will increase pressure on struggling retailers, particularly small businesses.   

“With discretionary spending slowing and operating costs rising across the board, wage increases without productivity improvements place businesses, particularly small businesses under significant pressure and can ultimately lead to price increases. 

“Wage growth is important; however, we have consistently advocated that any increase must reflect the context of inflation moderating, the decline of labour productivity and the cost-of-doing business challenges,” Mr Zahra said.

 “We are pleased to see consideration given to some of these areas in today’s decision.”

The Fair Work Commission considered the challenges faced by low-income workers in making their decision, as well as the impact of inflation and cost of doing business challenges faced by businesses. 

“In determining this level of increase, a primary consideration has been the cost-of-living pressures that modern-award-reliant employees, particularly those who are low paid and live in low-income households, continue to experience notwithstanding that inflation is considerably lower than it was at the time of last year’s Review,” The Fair Work Commission stated on its announcement of decision. 

“ At the same time, we consider that it is not appropriate at this time to increase award wages by any amount significantly above the inflation rate, principally because labour productivity is no higher than it was four years ago and productivity growth has only recently returned to positive territory.”

“We have treated the forthcoming increase to the Superannuation Guarantee contribution amount as a moderating factor.”

These changes are set to come into effect from the first pay period on or after 1 July 2024.

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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