Australia raises minimum wage by 5.75% as living costs surge
2023.06.01 21:14
© Reuters. FILE PHOTO: Office workers and shoppers walk through Sydney’s central business district in Australia, September 7, 2016. REUTERS/Jason Reed
SYDNEY (Reuters) – Australia’s independent wage-setting body said on Friday it would raise the minimum wage by 5.75% from July 1, as families grapple with soaring living costs.
The lowest-paid employees will receive A$22.61 ($15.34) an hour from July 1, according to Reuters calculations based on the current rate of A$21.38. The decision from the Fair Work Commission would affect more than 2 million workers.
“The level of wage increase we have determined is, we consider, the most that can reasonably be justified in the current economic circumstances,” said the Commission in a statement.
“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.”
Some economists have feared 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 2-3% target range.
So far, aggregate wage growth – which accelerated to a decade-high of 3.7% last quarter – has lagged forecasts, with Governor Philip Lowe warning of upside risks to wages from weak productivty growth, rather than nominal wages.
($1 = 1.4743 Australian dollars)
