Minimum Pay Boost for Australia's Lowest-Paid Workers
Millions of Australian workers will receive a pay rise following today’s announcement of a minimum wage increase.
Full-time workers on the minimum wage will take home an extra $33 a week, as the Fair Work Commission announced a 3.75% increase to minimum wages and awards on Monday. This change will affect about one in five workers, or 2.6 million people, starting from July 1.
“A primary consideration has been the cost-of-living pressures that modern award-reliant employees – particularly those who are low paid and live in low-income households – continue to experience,” said the commission’s president Adam Hatcher. “This increase is consistent with the forecast return of inflation to below 3% in 2025.”
In the 12 months leading up to the March 2024 quarter, prices rose slightly more than expected, with the Australian Bureau of Statistics revealing a 3.6% increase in the consumer price index.
The commission aimed to avoid increasing award wages significantly above the inflation rate. “Labour productivity is no higher than it was four years ago, and productivity growth has only recently returned to positive territory,” Hatcher noted.
The federal government’s submission emphasized that the “real wages of Australia’s low-paid workers do not go backwards” and that tax relief should not replace a wage boost. Peak union body the ACTU had called for a 5% increase, while industry groups argued for less than 3%.
The commission highlighted that Australians would soon see an increase in disposable incomes due to tax cuts and other cost-of-living relief measures included in the federal budget. However, an increase to the superannuation guarantee amount will moderate those benefits, according to Hatcher.
In 2023, the Fair Work Commission handed out substantial increases—5.75% for awards and 8.6% for the national minimum—based on a combination of low unemployment, falling wages, and high inflation.
Hatcher also revealed that the commission would soon launch proceedings to address gender undervaluation in modern awards and classifications that apply to women-dominated roles, including early childhood education, care workers, social workers, psychologists, dental assistants, and other jobs.