The federal government is advocating for a rise that ensures the nation's lowest-paid workers are not going backwards. Business groups want to see a more modest increase, to help contain inflation and ward off the threat of a recession. Unions are arguing for a 7% increase across the board.

Federal Government

The Government's submission to the Fair Work Commission’s (FWC) expert panel, recommends that the Fair Work Commission ensures the real wages of Australia's low-paid workers do not go backwards.

 

The position is similar to that put by the Government in last year's minimum wage.  That advocacy helped secure the 5.2% increase the FWC awarded, along with the 4.6% for higher award classifications.  The Government's submission "does not suggest that across-the-board wages should automatically increase in line with inflation, or that inflation is the only factor the Fair Work Commission should consider. If the Expert Panel takes heed of the submission, there will a two-tiered wage increase, that favours the lower paid.

 

Australian Chamber of Commerce & Industry (ACCI)

ACCI has called on the FWC to award a 3.5% rise in this year's minimum wage review, arguing this would amount to 4% when the legislated 0.5% increase in the superannuation guarantee is taken into account.

 

The 3.5% increase is the largest that ACCI has supported since the inception of the Fair Work Act in 2009 and tops the 3% rise it proposed in last year's minimum wage case.

 

The ACCI submission to the FWC's expert panel contends that the inflation-matching 7% sought by the ACTU would put upwards pressure on interest rates.

 

Australian Council of Trade Unions (ACTU)

The ACTU is seeking a 7% increase in this year's minimum wage review, pitching it just above the latest 6.8% rise in the CPI. The peak union body says the increase should apply to the national minimum wage and all award rates of pay, because those workers have suffered the biggest real pay cuts on record over recent years.

 

A 7% increase would lift the minimum hourly rate from $21.38 to $22.88 and the minimum annual full-time rate by $2,966, lifting it to $45,337.28.

 

Australia Catholic Council for Employment Relations (ACCER)

The Catholic Council for Employment Relations is calling for a 7.2% boost to the minimum wage and the rates of many award-reliant workers to help close the poverty gap by 2030, arguing the FWC wrongly rejected its stance last year on what constitutes a safety net.

 

In its submission to the minimum wage review, ACCER says a national minimum wage order must ensure that all groups of workers who are dependent upon those minimum wages are kept out of poverty and social disadvantage and provide for a decent standard of living, to guarantee a safety net of a fair minimum wage.

 

Conclusion

My thinking is that it will be a two-tiered wage increase with minimum wage employees being awarded an increase of around 5.5%.  While employees who are not on the minimum wage will be awarded a lesser amount in the vicinity of 3.75%.  The Commission may also instead of providing a percentage increase, provide a two-tiered dollar increase, commensurate with the percentage increase shown.

 

Either way, I think it will be good news for wage earners, but bad news for employers who are going to have to find the money to pay the increase. 

 

Source – Workplace Express.