The Fair Work Commission has announced that from July 1, 2024, Australia’s minimum wage and award wages will increase by 3.75 per cent. This decision applies to both the minimum wage and award wages and will have significant implications for approximately 2.6 million workers, constituting about 20.7 per cent of the national workforce.
This adjustment will result in the national minimum wage rising to $24.10 per hour and $915.91 per week for a standard 38-hour workweek. This increase, approximately $33 more per week, is aimed at addressing cost-of-living pressures faced by modern award-reliant employees, particularly those in low-income households.
The decision-making process of the Fair Work Commission was guided by considerations of living standards, escalating living expenses, and workforce participation. Despite the increase, it was deemed necessary to ensure that award wages do not stagnate, as they had remained lower in real terms over the past five years.
Various stakeholders, including trade unions and business organisations, had differing views on the appropriate adjustment. While the Australian Council of Trade Unions advocated for a 5 per cent increase, business groups proposed more modest adjustments ranging from 2 to 2.8 per cent. Ultimately, the Commission’s decision aimed to strike a balance between addressing workers’ needs and considering the economic landscape faced by businesses, particularly small enterprises.
The increase in wages is expected to provide some relief to workers facing inflationary pressures. However, concerns have been raised regarding the potential impact on businesses already grappling with rising costs and stagnant productivity. Despite these challenges, Treasury views the wage increase as reasonable, especially in light of the forthcoming stage 3 tax cuts, which will provide workers with additional disposable income.
Economists suggest that while the wage increase may not significantly affect inflation or wage growth targets, it represents a positive step in improving real wages after a period of subdued growth. Nonetheless, it remains to be seen how this adjustment will impact broader economic indicators and monetary policy decisions moving forward.