The Fair Work Commission has unveiled the increase to national minimum wage, and businesses will be surprised to discover it is larger than many had expected.
Writing for My Business just days ago, Employsure founder Ed Mallett suggested the national minimum wage (NMW) would increase “by no more than 2.4 per cent”, effective from July.
However, the commission revealed that the figure would actually increase by 3.3 per cent – taking the NMW to $694.40 per week or $18.29 per hour.
“The level of increase we have decided upon will not lead to inflationary pressure and is highly unlikely to have any measurable negative impact on employment,” the commission said in its statement announcing the increase.
“It will, however, mean an improvement in the real wages for those employees who are reliant on the NMW and modern award minimum wages, and an improvement in their relative living standards.”
Modern award minimum wages will also increase by 3.3 per cent, with weekly wages to be rounded to the nearest 10 cents.
In justifying the size of the increase, the commission noted that the real value of minimum rates has trailed that of labour productivity for consecutive years.
The prevailing economic circumstances provide an opportunity to improve the relative living standards of the low-paid and to enable them to better meet their needs. Over the last five years, the real value of the NMW and modern award rates has grown at 4.3 per cent, which is less than half the rate of growth of labour productivity.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
Ask the Experts: Does automation stack up financially?
By Christopher Overton
Opinion: How bad do things have to get?!
By Adam Zuchetti
Business lessons from the All Blacks
By Steve Stanley