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The Australian minimum wage has been raised by just $13 a week – 'substantially lower' than usual – as the country enters recession

Jack Derwin
  • The Fair Work Commission (FWC) has handed down a 1.75% increase to the minimum wage on Friday.
  • The raise amounts to just $13 per week for some 2.2 million Australian workers.
  • It comes far below the 3% raise handed down last year, with the FWC pointing to the impending recession as the major influence on its decision.
  • Visit Business Insider Australia's homepage for more stories.

The annual increase to the minimum wage has been slashed as Australian job losses approach one million.

Just a day after the unemployment rate officially rose to 7.2% – or 11.3%, depending on how you cut it – the Fair Work Commission (FWC) has handed down a fairly meagre wage increase for 2.2 million working Australians.

The FWC panel decided to lift the wage by 1.75% taking it to $19.84 per hour, or the equivalent of $753.80 a week.

In handing down the decision, FWC president Justice Iain Ross said the arguments raised by employer groups, unions as well as state and federal governments were "sharply polarised".

"The [Australian Council of Trade Unions] proposed a 4% increase... [while] the Australian Chamber of Commerce and Industry, [Australian Industry] Group and other employer bodies proposed that there should be no increase to minimum wages," he said in a recorded message.

In 2019, the FWC handed down an increase of 3%. Ross said that this year's "substantially lower" increase came as the country headed into its first recession in nearly 30 years.

"The Australian government did not propose a specific outcome but urged the panel to take a cautious approach and to prioritise keeping Australians in jobs and maintaining the viability of businesses," he said.

In its decision, the FWC acknowledged that COVID-19 pandemic "casts a large shadow over the current economic environment", but that any increase that did not keep pace with the cost of living would "amount to a real wage cut".

ACTU secretary Sally McManus, however, said the increase didn't go far enough.

"The wage increases will have some stimulus [effect] but not enough. The very first thing they should do to give workers and the economy confidence is to extend JobKeeper and JobSeeker," she told media.

McManus argued that putting more money in consumers hands would actually help, not harm, businesses.

https://twitter.com/sallymcmanus/status/1273806495440793601

Even still, those increases won't be effective for most workers for months. Essential workers will receive the boost as of July 1, but construction and manufacturing workers won't until November. Australians working in retail, hospitality, aviation and arts, meanwhile won't get it until February, after many retail workers, for example, see their hours drop off anyway.

Coincidentally, the new level will put most workers on the same wage that JobKeeper would pay them.

Now all eyes will be on whether or not the government gives that the chop in September.