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Wage increase no good for youth: ACCI

Unemployed young people will be disadvantaged if the minimum wage is too high, Australia's peak business body says.

The Australian Chamber of Commerce and Industry (ACCI) has asked the Fair Work Commission to increase the minimum wage by no more than 1.2 per cent, or $7.90 extra per week, making a weekly wage of $664.80.

ACCI spokesperson Patricia Forsythe said the 730,000 Australians out of work, including 250,000 young people, need a "job-friendly" approach to the minimum wage.

"Economic data shows there is spare capacity in the labour market, indicating that many low-paid and low-skilled workers are struggling to find work," Ms Forsythe said.

"In setting the minimum wage, the Fair Work Commission must avoid impeding access to jobs or training opportunities, which can set people on a path to higher pay later in life."

Youth unemployment is at 12.2 per cent, Ms Forsythe said, more than double the national unemployment rate of 5.8 per cent.

Ms Forsythe said the lack of wage growth, now at a record low, indicates employers are unable to pay workers more.

"Jobs that use awards are key pathways into the workforce for unemployed young people," Ms Forsythe said.

"The minimum wage decision has a significant impact on the number of these award-reliant jobs available, so higher minimum wages hurt young people."

The Australian Retailers Association has also proposed an increase of $7.90, while the Australian Industry Group has wants $10.50 and the Australian Council of Trade Unions is pushing for $30.

"A $30 a week rise for our lowest-paid workers is vital if we're to halt the alarming slide in living standards that is threatening the economic wellbeing of one in five Australians," ACTU secretary Dave Oliver said.

The ACCI submitted its proposal to Fair Work on Wednesday, one of 22 submissions from organisations about the forthcoming June wage ruling.

The Fair Work Commission's decision on the new minimum wage will take effect from July 1.