Australia to raise minimum wage by 5.75% from July
From July 1, the minimum wage in Australia would be raised by 5.75% to help more than two million employees cope with rising living costs.
According to the Fair Work Commission, the lowest-paid employees will receive A$22.61 (US$15.34) an hour, which is “the most that can reasonably be justified in the current economic circumstances.”
“In our consideration, we have placed significant weight on the impact of the current rate of inflation on the ability of modern award-reliant employees, especially the low-paid, to meet their basic financial needs,” Australia’s independent wage-setting body added.
Some economists have expressed concerns that a sizeable increase could set a benchmark for other wage expectations and complicate the Reserve Bank of Australia’s job of returning inflation back to the 2-3 per cent target range, reported Reuters.
The Australian Bureau of Statistics (ABS) had earlier reported that wages in Australia grew by slightly more than expected in the first four months of 2023, compared to the same period in 2022.
The wage price index rose 0.8% in the March quarter from the previous quarter, just under forecasts of a 0.9% increase. The annual pay growth, however, accelerated to 3.7% from a revised 3.4% the previous quarter, which was higher than the forecasts of 3.6%.
The annual wage growth is expected to hit 4.0% at its highest at the end of this year before easing back to 3.7% by mid-2025.