MINIMUM WAGE HIKE DOUBLE INFLATION BUT NOT ENOUGH

In Payroll & Employment by Clyde Mooney

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The new minimum wage and hourly rate comes into effect in two weeks, and an increase twice the rate of inflation still sees the usual pundits not satisfied.

From 1 July the minimum wage will rise 41c an hour to $17.70, or $15.80 per week to $672.70, representing a gain of 2.4 per cent. Inflation has risen 1.3 per cent over the same period.

In 2015 the Fair Work Commission (FWC) lifted the minimum wage 2.5 per cent, and justifies the above-inflation increases saying the “robust” economic climate allows for it.

Business advocacy groups such as the Australian Chamber of Commerce & Industry had been pushing for an increase in line with inflation and suggest the FWC’s move will result in job losses and business closures.

The Chamber notes the average increase in private sector wages over the past year was just 1.9 per cent.

“Consistently granting increases above the wage rises received by other workers is inconsistent with the role of minimum and award wages as a safety net,” said chief executive James Pearson in a statement.

But the Australian Council of Trade Unions (ACTU) said it was not enough, not true to Prime Minister Turnbull’s “great time be an Australian”, and after inflation would amount to little more than six dollars a week.

The ACTU had been pushing for an increase of 2.7 per cent, or $18.07 a week.

The deadline for employers to adjust to the new pay rates is the new financial year – 1 July, 2016.