Australia Increases Minimum Wage by 5.75% In the Face of Inflation
A 5.75 percent raise in the national minimum wage has been approved by Australia‘s industrial relations tribunal.
The changes will go into effect on July 1st, the Fair Work Commission (FWC) stated on Friday.
The increase falls between the roughly 4% desired by corporate groups and the 7% increase backed by the Australian Council of Trade Unions.
The FWC stated in announcing the decision that the current economic situation, which includes low unemployment, declining real wages, and high inflation, “is very unusual and presents a particular challenge in this year’s Review.”
The predicted steep slowdown in economic growth over the coming year, the commission stated in the announcement statement, will present an additional obstacle.
“We have given the effect of the current pace of inflation on the capacity of contemporary award-reliant employees, particularly the poorly paid, to meet their fundamental financial necessities a significant amount of weight in our assessment.
“Inflation is making the real value of these workers’ incomes smaller and putting financial strain on households.”
Data from the Australian Bureau of Statistics show that inflation increased from 6.3 percent in the 12 months ending in March to 6.8 percent in the 12 months ending in April.
After the temporary reduction in the government’s fuel excise tax came to an end, fuel costs rose sharply, which was a major factor in the jump.
The cost of housing, food, and transportation all increased by over 7% within the same time period.
The commission stated that despite the cost-of-living crisis, the awarded rise would not preserve the real worth of the minimum wage or stop the decline in real wages.
According to it, 5.75 percent was the maximum that could be justified given the state of the economy.
