Australia has a new minimum wage of $740.80 per week, but the 3% bump is less than half of what the unions wanted

  • The Fair Work Commission has announced a new national minimum wage of $740.80 per week or $19.49 per hour after a review by its expert panel.
  • The 3% increase is lower than last year’s decision by the commission to increase the minimum wage by 3.5%.
  • The Australian Council of Trade Unions was advocating for a 6% increase of an additional $43 per week.

Wage growth is famously elusive at the moment. But at least 2 million Australians might be about to get a pay rise.

The Fair Work Commission has announced a new national minimum wage of $740.80 per week or $19.49 per hour after a review by its expert panel for annual wage reviews.

The figure amounts to an increase of 3.0% or $21.60 per week to the weekly rate. It has also announced an increase of 3.0% in all modern award minimum wages, which govern minimum mandatory pay rates in certain occupations or industries. For C10-level tradies, for example, this equates to an increase of $25.10 per week.

The decision will take effect from the start of the first full pay period after 1 July 2019. The commission anticipates that 2.2 million Australians will benefit.

The 2019 increase is lower than the 3.5% increase awarded by the commission in 2018. It is also lower than the Australian Council of Trade Unions, as well as left-leaning think-tank The Australia Institute, have been calling for in the lead-up to today’s decision.

But the commission said its decision is line with current economic conditions.

“We have decided to award a lower increase this year than that awarded last year having regard to the changes in the economic environment (in particular the recent fall in GDP growth and the drop in inflation) and the tax-transfer changes which have taken effect in the current review period and which have provided a benefit to low-paid households,” the panel said in a statement announcing the decision.

“We are satisfied that the level of increase we have decided upon will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment.”

It also said the living standards of many — but not all — Australians who are reliant on mandatory minimum wages have been increasing in recent years.

“Our overall assessment is that the relative living standards of NMW and award-reliant employees have improved over recent years, although some low-paid award-reliant employee
households have household disposable incomes less than the 60 per cent of the median income relative poverty line,” the statement said.

Australian women are disproportionately represented among Aussies reliant on minimum wages, according to the commission.

It expects the 3.0% increase to help reduce the gender pay gap.

Employer organisation Australian Industry Group issued a statement welcoming the decision and arguing that the union proposal would have had negative economic consequences.

“The Fair Work Commission has accepted the arguments of the Australian Industry Group that a lower minimum wage increase should be awarded this year because of slow economic growth, low inflation and increased tax transfer payments which have provided a benefit to low-paid households,” Ai Group CEO Innes Willox said in a statement.

“The FWC has decisively rejected the 6% wage increase sought by the ACTU. In its decision, the commission has commented that the level of increase proposed by the ACTU would ‘run a significant risk of disemployment and of adversely affecting the employment opportunities of low-skilled and young workers’.”

Business Insider Australia has sought comment from other employer organisations including the Business Council of Australia and the Australian Federation of Employers and Industries.

UPDATED 2:23pm 30/5/19: This article was updated to include comments from Ai Group CEO Innes Willox.

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