Minimum Wage Rise Possible

Australia’s lowest paid workers could receive almost $1500 extra every year if a push for an increase in the minimum wage is approved.

The powerful Australian Council of Trade Unions (ACTU) made a submission to the Fair Work Commission calling on the Abbott Government to lift the minimum wage by $27 a week from $640.90 to $667.90.

"Unions calls on Joe Hockey to back the ACTU’s claim to increase the minimum wage and compulsory super to ensure Australia’s lowest paid workers are not worse off,” ACTU Secretary Dave Oliver said.

“Maintaining a fair minimum wage is essential if Australia is to avoid creating an underclass of working poor. The annual minimum wage case is the only opportunity for 1.86 million of Australia’s lowest paid workers to receive a pay rise.

“Research shows boosting the minimum wage is good for workers and does not have a negative impact on employment.”

The ACTU said the Abbott Government’s decision to freeze the 0.5 per cent increase means 1.86 million Australians on minimum wages will have their retirement savings cut.

It said a full-time worker on the national minimum wage will be $3.20 per week, or $167.09 per year, worse off as a result.

According to the ACTU, for a 20-year-old minimum wage worker, the loss of a 0.5 per cent increase in compulsory super until 2021 means they will be $18,401 worse off in retirement.

But the Australian Industry Group said the submission was unrealistic and could in fact do more damage than good.

"The unions' proposed minimum wage increase is unrealistic, unsustainable and would be unfair to those whose jobs prospects it would damage,” CEO Innes Willox said.

"Equally unrealistic is their claim for awards to include an obligation to pay an additional 0.5% superannuation contribution on top of the 9.5% required by the Superannuation Guarantee. It is nothing less than irresponsible.

"We have reached this position based on a number of factors. The best that can be said for the Australian economy in 2015 is that it is underperforming. This underperformance is evident across a range of key economic measures including GDP growth, business profitability, real incomes, productivity, inflation, employment and investment.”

Willox said the Australian Industry Group would instead propose a 1.6 per cent wage increase. This would equate to a $10.25 per week increase on the minimum wage and about $12.00 at the base trade level.

"Raising Australian minimum wages beyond a modest amount would further damage Australian competitiveness. Our minimum wage levels are already amongst the highest in the OECD," he said.

But Opposition Leader Bill Shorten recently told ABC Radio that international examples showed that raising the minimum wage would not cost jobs.

"With the minimum wage, I don't accept the case has been made that it contributes to unemployment levels in this country. The experience in Europe where they have started to increase or introduce the minimum wage has been exactly the opposite,” Shorten said.

The Fair Work Commission will deliberate and present its decision later this year.