Australian government against minimum wage raise

In its submission to the Fair Work Commission’s annual review, the government, citing a continuing uncertain global and domestic economic outlook, is not advocating for a large increase in minimum wage. 

It called for a “cautious” approach that would lead to job creation and ensure business viability through the post-pandemic economic recovery.  

“Higher labour costs during this challenging period could present a major constraint to small business recovery and may dampen employment in the sector. The risk of domestic outbreaks and ongoing disruptions to other major economies mean the economic environment remains uncertain. Although the vaccine rollout is underway, COVID-19 outbreaks that would necessitate further containment measures remain a significant risk,” the submission said, according to 7news. 

However, the Australian Council of Trade Unions (ACTU), which has called for an increase of A$26 a week (US$19.9) in minimum wages, argued that increasing the minimum wage would allow low-income earners to spend the money and stimulate the economy. 

“One thing we absolutely know is that people on the minimum wage, on the lowest wages, they spend every single cent that they earn, so it is a very effective way of ensuring that local businesses, small businesses, are getting customers through the door,” said ACTU secretary Sally McManus. 

READ: Australian unions call for minimum wage hike as wage support ends

“The worst thing we can do in terms of a recovery is not have consumer confidence or consumer spending because that is what will keep small businesses alive, so if we’re to have V shape to recovery for jobs and for profits, we have got to have it for wages as well,” she added. 

McManus has said the withdrawal of the government wage subsidy – JobKeeper – would lead to an estimated 150,000 people losing their jobs, according to The Guardian.