By Renju Jose and Stella Qiu
SYDNEY (Reuters) – Australia's independent wage settling agency rose by 3.5 per cent nationwide minimum wage, effective July 1, with about 2.6 million workers increasing their real wages by about 2.6 million as inflationary pressures ease in the economy.
According to the Fair Work Commission (FWC) annual review, the minimum interest rate will rise to $24.94 per hour ($16.19) per hour, an additional $1,670 per year for full-time employees.
Price inflation for headline consumers continued 2.4% in the first quarter, within the Reserve Bank of Australia's target bands 2% to 3% and fell from a peak of 7.8% at the end of 2022.
FWC president Adam Hatcher said the decision could help many workers make up for their real income in the past few years, due to the high cost of living.
“If this opportunity is not seized in this annual salary review, the loss of actual wage value incurred will become permanently embedded … and reduce the living standard of the community with the lowest salary,” Hatcher said.
Last year, the FWC minimum wage increased by 3.75%, but this is primarily in line with inflation.
The Australian Trade Union Commission (ACTU) described wage increases as a “huge result” for employees with minimum wages, and suffered the most losses when inflation soared after the 19009 pandemic.
Actu secretary Sally McManus told reporters: “Our lowest workers are returning to the lead.”
The Reserve Bank of Australia lowered interest rates by two-year lows last month as cooling inflation in homes provides a range to cope with rising global trade risks and open up for further easing in the coming months.
Meanwhile, the labor market remains surprisingly resilient, with unemployment hovering at 4.1% in more than a year. Employment benefits are driven by surges in public sector jobs, but wage growth still shows that there is little risk of harming wage prices.
($1 = AUD 1.5401)
(Reports by Stella Qiu and Renju Jose in Sydney; Editors by Jacqueline Wong and Lincoln Feast.)
