More than 2.2 million Australians will receive a $18.80 weekly pay rise as the Fair Work Commission moves to increase the minimum wage.
That means Australia's lowest paid workers will now receive $20.33 an hour, or $772.60 a week. The increase reflects a 49 cent an hour increase.
The 2.5 per cent increase falls short of unions’ desired 3.5 per cent increase, but is significantly greater than the 1.75 per cent increase handed down last year.
Australian employer body, AI Group had called for the Fair Work Commission to limit this latest increase to 1.1 per cent, expressing concerns that businesses would be unable to cover the increased wages.
Fair Work Commission president Justice Iain Ross said this year's decision came down to the strength of the Australian economy today.
"There was a broad consensus in the submissions before us that the current performance of the economy has exceeded expectations and that the economic recovery is well underway," he said.
Delays to wage increase
While the new minimum wage traditionally comes into place on 1 July of the following financial year, some sectors will not receive the pay rise next month.
Employees in certain retail sectors, tourism, fitness and aviation will receive the pay rise from 1 November 2021, while other retail workers will receive the hike from 1 September.
Australian Council of Trade Unions (ACTU) secretary Sally McManus described the decision to delay the increase for retail workers as particularly disappointing.
"Retail workers are essential workers who worked all the way through the pandemic. Some of those workers, work for very profitable companies that had record profits during the pandemic. There is no reason, in fact it is unfair, to delay those increases," McManus said.
McManus also said the overall increase was not enough.
"While the pay increase of 2.5 per cent is a lot more than what the employers and the Government had argued for, it doesn't keep up with the essentials," she said.
"At the moment, those essentials that are going up more than 2.5 per cent are fuel, medicine, rent - all of these things are essentials people have no choice other than to spend money on."