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Keep a lid on minimum wage, employers cry

Adam Zuchetti
Adam Zuchetti
14 March 2018 1 minute readShare
Angry, work, businessman

Business groups are petitioning for minimum and award wage rates to be capped at the rate of inflation, but one group has reportedly called for a freeze on the minimum wage.

Both the Australian Chamber of Commerce and Industry (ACCI) and the Australian Retailers Association (ARA) have submitted to the Fair Work Commission that an increase in the minimum wage and modern award rates should be capped at 1.9 per cent, in line with the current rate of inflation.

“Given the constant rise in rental prices, energy costs and slow retail growth, this 1.9 per cent increase will allow retail to maintain its position as Australia’s largest private employer,” the ARA’s executive director Russell Zimmerman said.

“The ARA’s submission has outlined the difficult trading environment in the retail sector due to rising cost pressures, unsustainable rents, increasing competition and weak consumer confidence.

“With weak sales growth and wage levels well above our international competitors, it’s critical that the Fair Work Commission (FWC) acknowledge the volatile economic trading conditions when making their decision.”

Meanwhile, ACCI head James Pearson said wages need to increase to match the cost of living, but argued that anything above inflation would not be good for those businesses dependent on award rates, particularly SMEs.

“Businesses impacted by the minimum wage and award wages decision include small and medium businesses with lower profit margins, many with higher wages and salaries as a proportion of total expenses and lower survival rates,” said Mr Pearson.

“Award-reliant sectors such as retail are facing intense competition from the online global market.

“The current reality is that growth in the economy remains patchy and below-trend.”

Mr Pearson swiped at union claims that a rise of 7.2 per cent in the minimum wage is warranted.

“It’s hard to understand why the union movement demands an unrealistic 7.2 per cent increase in minimum wages when they know the tough conditions that small businesses face.”

However, it was the National Retail Association that attracted raised eyebrows, telling The Australian it is actively pushing for a minimum wage freeze – or a pay cut for workers in real terms.

Its CEO Dominique Lamb reportedly said its members “are unable to sustain an increase in base wages at this time”, and that it was the first time the association had advocated for wages to remain on hold.

The Fair Work Commission’s verdict will be closely watched this year, after full-time workers effectively copped a pay cut in the year to 2017.

Employers have been urged to be more transparent with their employees about their state of play, after a recruitment firm found a marked discrepancy between the workers who think their company is in a strong financial position and the actual financial position that business leaders report.

Keep a lid on minimum wage, employers cry
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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