Karmactive Staff
Almost 3 million Australians will see bigger paychecks starting July as the Fair Work Commission (FWC) has approved a 3.5% increase to the minimum wage.
From July 1, the minimum hourly rate climbs to $24.95, adding $32 per week to full-time workers’ pay packets and bringing the annual salary to $49,296. This boost outpaces the current inflation rate of 2.4%, giving these workers a real wage increase for the first time in years.
“Since July 2021, employees who are reliant upon modern award minimum wages, or the national minimum wage, have suffered a reduction in the real value of their wage rates,” said FWC President Adam Hatcher when announcing the decision. “We are concerned that if this opportunity is not taken in this Review, the loss in the real value of wages which has occurred will become permanently embedded.”
The wage increase affects workers in sectors like hospitality, healthcare, retail, and admin services – industries where women make up a large portion of the workforce. While millions have their pay linked to award rates affected by this decision, government figures show fewer than 100,000 people actually earn the bare minimum wage.
Prime Minister Albanese backed the increase, saying it would be “welcomed by people who keep our economy going, the essential workers who need this wage increase in real terms.”
The 3.5% rise falls between what unions wanted (4.5%) and what business groups pushed for (around 2.5%).
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Union leader Sally McManus called it a “great outcome,” saying it means “our lowest-paid workers are getting ahead again” after struggling with rising living costs.
Business groups expressed concerns. Andrew McKellar from the Australian Chamber of Commerce and Industry called the increase “generous” and noted it comes “against a backdrop of declining productivity.”
Small business advocates warned that smaller operations would feel the squeeze, especially since they’re already battling high energy bills, rent increases, and insurance costs. They also highlighted that the wage bump triggers higher costs for workers’ compensation, payroll taxes, and the upcoming increase in superannuation guarantee contributions.
The FWC acknowledged Australia’s productivity problems but stated “the productivity problem will not be resolved by the indefinite continuation of the reduction in real wages.”
With inflation now back in the Reserve Bank’s target zone of 2-3%, the Commission saw a chance to help workers regain some ground without risking a price spiral.
This year’s 3.5% increase follows a 3.75% boost awarded by the Commission last year.
