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 the rising cost of living.
The lowest-paid employees will get A$22.61 ($15.34) per hour from July 1, according to Reuters calculations based on the current rate of A$21.38. The Fair Work Commission’s decision will affect more than two million workers.
“The level of wage increase we have set is, in our opinion, the highest level that can reasonably be justified under the current economic conditions,” the commission said in a statement.
In our reasoning, we have focused largely on the impact of the current rate of inflation on the ability of workers who depend on modern bonuses, especially those on low incomes, to meet their basic financial needs.
Some economists fear that the sharp increase will serve as a benchmark for other wage expectations and make it difficult for the RBA to return inflation to its target range of 2-3%.
Overall wage growth — which accelerated to a record 3.7% in the most recent quarter — has so far fallen short of expectations, with Governor Philip Lowe warning of the risks of higher wages due to lower productivity growth, rather than nominal wages.
($1 = 1.4743 Australian dollars)
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