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Australian industry groups have warned that a new wave of minimum wage increases could put businesses across the country on the brink of collapse.
Under the latest decision of the Fair Labor Relations Commission on June 15, more than 2.6 million Australians are eligible for a $ 40 ($ 27) weekly salary increase starting July 1. This is an increase of 5.2 percent.
With the highest wage increase in 16 years, the hourly wage will be $ 21.38 and the minimum wage will be $ 812.60 per week.
Still, employees in the aviation, tourism and hospitality departments have to wait until October to get a salary increase.
The Fair Labor Relations Commission’s decision was well received by the union and Labor government, but peak hospitality and retail agencies were worried that high levels of wage increases could lead to business closures.
Belinda Clarke, CEO of Restaurant and Catering Australia, said the decision would put additional inflationary pressure on companies struggling to recover from the COVID-19 pandemic.
“This would sadly mean more business closures,” she said.
“We are pleased that the Commission has agreed to our submission by postponing the implementation of the award rate increase to October, but that many business owners have limited capacity to absorb additional costs. I know that.”
The Australian Retailers Association, which advocated a 3.2% increase, also said higher costs would overwhelm companies.
In addition, Innes Willox, CEO of the Australian Industrial Group, said raising the minimum wage would exacerbate already high inflation.
“This wage increase will put a lot of pressure on the business as it is already under pressure from rising energy costs, rising interest rates, and concerns about their own inflation,” he told ABC Television. ..
“For many employers telling us, especially small ones, it’s very problematic to have a hard time paying for this and have to make decisions about future employment.”
Willox added that the need for a wage increase is undisputed, but a 5.2 percent increase would have significant consequences.
Meanwhile, Edwina McDonald, chief executive officer of the Australian Social Welfare Council, welcomed the decision, adding that real wage rates have been stagnant for 10 years.
“At least to make up for inflation, we can and should raise it significantly, without causing a wage spiral or rising unemployment,” she said.
Similarly, Prime Minister Anthony Albanese said low-wage workers should raise real wages to counter rising inflation.
“Many of the minimum wage people are heroes who have seen us over the pandemic.” He said..
“These workers were worth more than our gratitude, deserved a salary increase, and they got it.”
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Alfred Bui is a Melbourne-based Australian reporter with a focus on local and business news. He is a former small business owner and holds two master’s degrees in business and business law. Contact him at [email protected].
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