Over 14 million employed Australians will see a 3.75 per cent increase in their minimum wage by July 1, following a Fair Work Commission announcement.
The decision comes after the 2023-2024 annual wage review took into consideration the current cost-of-living crisis, giving many low-income families some financial relief.
In a statement the Australian Fair Work Commission Annual Wage Review indicated that the current living pressures of low-income households was a big factor, and that inflation was considerably lower than it was last year.
According to the Australian Bureau of Statistics, the average weekly income for a full-time employee is $1,886.50.
The Australian Council of Trade Unions has continuously rallied for increases to the minimum wage; however, after eight years of stagnant wages, there is much further to go.
In a statement the ACTU said that wage suppression needed to end.
“Suppressing wages hurts economic recovery and the working people, their families, and their communities,” an ACTU spokesperson said.
“There can only be economic recovery with a wage recovery.
“This wage rise goes to one in four working people – and this process is the only avenue those people have to a pay rise each year.”
In a post-pandemic world, the ACTU said the Australian economy never fully recovered despite the government’s efforts, and because of this, the increase comes at a pivotal time.
The sectors that would most benefit from a significant increase, including retail and hospitality, will see this increase in September 1 and November 1.
Both sectors worked through the pandemic to provide for the rest of the population isolated at home. The ACTU found it disappointing that these employees will not reap the rewards sooner.
“It is incredibly disappointing that the Commission has delayed increases for any workers, especially those who have worked throughout the pandemic and whose employers have posted record profits,” a spokesperson said.
Treasurer Jim Chalmers said that the increase supports the cost of living pressures.
“Our economic plan is all about helping Australians earn more and keep more of what they earn; our Budget is focused on easing cost-of-living pressures, including delivering a tax cut for every taxpayer,” Mr Chalmers said.
“We believe one of the best ways to deal with cost of living pressures is to ensure workers earn enough to provide for their loved ones and to get ahead.
The May 2024 budget estimated that the cost of living policies are expected to directly reduce inflation by three quarters of a per cent in 2023-2024 and by half a per cent come 2025.
Following the decision to increase the minimum wage, the government has imposed higher incentives for future industries, including TAFE and university funding.
“We’ll continue to do what we can to help Australians earn more and keep more of what they earn with a Budget and an economic plan focused on easing inflation, delivering tax cuts for every taxpayer and creating the conditions to drive sustainable wage growth into the future,” Mr Chalmers said in a statement.
Employed young Australians living out of home have been financially burdened during the cost-of-living crisis as ticketed items have significantly increased, yet wages have remained the same.
24-year-old Steph Ingram has been living out of home for six years, financially supporting herself with her own and her partner’s income.
“I feel really fortunate right now in terms of financial stability to pay bills and to rent a house,” Ms Ingram said.
“With having a dual income household, and a partner in a profession that earns a decent wage, we are able to live within our means in this economy.”
Working in management for the past seven years, Ms Ingram has seen many employees resign due to rising pressures and not reaping the rewards.
“I think that if you paid the employees a rate based off the actual workload being completed, turnover would decrease and employee culture would improve,” she said.
18-year-old Jay Prenter is on the receiving end, living out of home and trying to juggle her first year of university while working enough to afford rent and petrol for her car.
“Some weeks I’m juggling multiple assignments and I have to choose whether I want to prioritise work so I can pay rent and feed myself or uni so I can do my complete my degree,” she said.
On average, Australians are getting married at 32. For people in the same position as Ms Ingram, getting married is the second option to having a roof over their heads.
“If there was an increase that actually matched the cost of living, our goals would become more attainable,” she said.
“We wouldn’t have to choose between saving for a house to build a family in or saving for a wedding so we can get married.”
In comparison, other Australians are just trying to tick all the tradition boxes.
“If the increase to minimum wage actually matched the cost of living, I’d be able to focus more on my studies,” Ms renter said.
Although the current plan to improve the minimum wage is set to alter the trends seen in the last ten years, it is expected that movement within the workforce will become less stagnant.
