Fair Work orders 2.5 per cent increase in minimum wage

Australia’s lowest-paid workers will receive a pay increase of 2.5 per cent with the Fair Work Commission ruling the country can afford it.

That will see the minimum wage rise by 49 cents an hour to $20.33.

The weekly minimum wage will rise by $18.80 to $772.60.


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Unions had argued for an increase this year of 3.5 per cent while business groups were pushing for an increase of just 1.1 per cent.

The increase comes after a rise of just 1.75 per cent last year due to the pandemic.

In its ruling, the Fair Work Commission says conditions were much better than they were last year, justifying a bigger increase.

“The Australian economy has recovered to a greater extent and more quickly than anticipated,” the FWC said.

The FWC found that the increase proposed by unions posed a risk of ‘disemployment’ and could affect the employment opportunities of low-skilled and young workers.

But it also found the increase proposed by business groups would amount to a real wage cut.

“Such an outcome would mean that many award-reliant employees, particularly low-paid employees, would be less able to meet their needs.

“For some households, such an outcome would lead to further disadvantage and may place them at greater risk of moving into poverty.”

Labor’s Industrial Relations spokesperson Tony Burke welcomed the ruling but believes the increase should have been higher.

“Today’s pay rise has been hard fought for. It may well have been higher if it wasn’t for the fact that Australia’s government, the Morrison refuse to lift a finger in arguing for higher rates of pay,” Mr Burke said.

The increase will come into effect from July 1, 2021, however, retail workers will have to wait until September, while those in industries including fitness, aviation, tourism and events will have to wait until November.

ACTU Secretary Sally McManus says that’s very disappointing, especially when it comes to retail workers.

“Retail workers are essential workers who worked all the way through the pandemic, some of those workers work for very profitable companies and had record profits during the pandemic,” Ms McManus said. 

“There is no reason, in fact, it is unfair, to delay those increases.”

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