Minimum wage to increase by just 1.75 per cent amid COVID-19 recession

Australia’s lowest-paid workers will get a $13 a week pay rise but different job sectors will see the increase at different times.

Despite calls from peak union bodies for a drastic increase, the Fair Work Commission confirmed on Friday morning the national minimum wage will only rise by 1.75 per cent.

It will see the the hourly rate increase to $19.84, a total of $753.80 a week.


However, the rise will be staggered for different industries depending on how well they have endured the coronavirus crisis.

Frontline health care and social assistance workers, teachers, childcare workers and other essential services will see an increase from July 1.

Group 2 awards, which includes construction, manufacturing and other industries, will see an increase from November 1.

Group 3 awards, which will affect those already hardest hit by the economic crisis, like tourism, accommodation, aviation and retail, wont see the increase until February 1 2021.

Business groups had argued the minimum wage should be frozen until mid-2021 to enable people impacted by the downturn to find jobs. The federal government had also opposed any substantial increase.

Fair Work Commission President Iain Ross said if wages were frozen it would “result in a real wage cut”.

“This would mean that many award reliant employees, particularly low paid employees, would be less able to meet their needs,” Mr Ross said.

“For some households it would lead to further disadvantage and may place them at a great risk of moving into poverty.”

The Fair Work Commission admits it has taken a “cautious” approach to the wage increase, due to the uncertainty surrounding the pathway out of the recession.

“Last year, the panel awarded a three per cent increase. The majority have decided to award a substantially lower increase this year due to the marked change in the economic environment.

Peak union body the ACTU had argued for a four per cent rise this year but Mr Ross said the panel did not agree.

“Awarding an increase of the size proposed by the ACTU would pose a real risk of disemployment and of adversely affecting the employment opportunities of the low skilled and young workers,” he said.

The announcement comes just a day after revelations the unemployment rate had spiked to its highest level in nearly two decades at 7.1 per cent, as a further 227,700 people lost their job.

May’s monthly drop in the number of people employed is the second-largest on record, after nearly 600,000 were sacked in April.

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