Aus Increases Minimum Wage by 3.75%

[Occams Barber]

The Guardian
3 June 2024


Minimum wage workers in Australia to get a 3.75% pay rise over the next 12 months

Australia’s lowest-paid workers will collect a pay rise of 3.75% in the coming year, a result likely to please the Reserve Bank but dismay unions who sought a 5% rise.

The Fair Work Commission announced the 2024-25 decision for minimum and award wages on Monday. The increase affects about one in four employees from 1 July.

The increase will raise the minimum weekly wage to (Aus)$915.90 (up from $882.80). Hourly wages will increase to (Aus)$24.10 (from $23.23), the commission said.

The commission president Adam Hatcher argued it was “not appropriate at this time to increase award wages by any amount significantly above the inflation rate, principally because labour productivity is no higher than it was four years ago, and productivity growth has only recently returned to positive territory”.

Minimum wage workers in Australia to get a 3.75% pay rise over the next 12 months | Wages growth | The Guardian

Some Background:

• Around 25% of Australian workers receive the minimum wage.
• The minimum wage is reviewed and reset annually by the independent Fair Work Commission (FWC).
• The review is based on submissions from employee and employer groups along with the Federal government. The FWC is required to factor possible inflation effects into its decision.
• The FWC minimum wage decision sets a mandatory minimum for all wages across Australia
• Australia has had some form of annual minimum wage review since 1907.
• In 2023 the minimum wage was increased by 5.75%. In 2022 the minimum wage was increased by 5.2%.
• Based on 2022 data Australia has the fourth highest minimum wage in the OECD. UK is eighth highest and US sits at 21.

Real minimum wages

OECD.Stat enables users to search for and extract data from across OECD’s many databases.

stats.oecd.org

OB

 

[Pommer]

The Guardian
3 June 2024


Minimum wage workers in Australia to get a 3.75% pay rise over the next 12 months

Australia’s lowest-paid workers will collect a pay rise of 3.75% in the coming year, a result likely to please the Reserve Bank but dismay unions who sought a 5% rise.

The Fair Work Commission announced the 2024-25 decision for minimum and award wages on Monday. The increase affects about one in four employees from 1 July.

The increase will raise the minimum weekly wage to (Aus)$915.90 (up from $882.80). Hourly wages will increase to (Aus)$24.10 (from $23.23), the commission said.

The commission president Adam Hatcher argued it was “not appropriate at this time to increase award wages by any amount significantly above the inflation rate, principally because labour productivity is no higher than it was four years ago, and productivity growth has only recently returned to positive territory”.

Minimum wage workers in Australia to get a 3.75% pay rise over the next 12 months | Wages growth | The Guardian

Some Background:

• Around 25% of Australian workers receive the minimum wage.
• The minimum wage is reviewed and reset annually by the independent Fair Work Commission (FWC).
• The review is based on submissions from employee and employer groups along with the Federal government. The FWC is required to factor possible inflation effects into its decision.
• The FWC minimum wage decision sets a mandatory minimum for all wages across Australia
• Australia has had some form of annual minimum wage review since 1907.
• In 2023 the minimum wage was increased by 5.75%. In 2022 the minimum wage was increased by 5.2%.
• Based on 2022 data Australia has the fourth highest minimum wage in the OECD. UK is eighth highest and US sits at 21.

OB

~$16.10 USD

 

[Nithavela]

Still barely enough to keep up with current inflation.

Australia Inflation Rate

Inflation Rate in Australia decreased to 2.40 percent in the fourth quarter of 2024 from 2.80 percent in the third quarter of 2024. This page provides the latest reported value for - Australia Inflation Rate - plus previous releases, historical high and low, short-term forecast and long-term...

tradingeconomics.com

I'm also greatly surprised that the amount of Australians who make minimum wage is so high. One in four workers being paid as little as is legally possible seems egregious.

 

[Occams Barber]

Still barely enough to keep up with current inflation.

Australia Inflation Rate

Inflation Rate in Australia decreased to 2.40 percent in the fourth quarter of 2024 from 2.80 percent in the third quarter of 2024. This page provides the latest reported value for - Australia Inflation Rate - plus previous releases, historical high and low, short-term forecast and long-term...

tradingeconomics.com

I'm also greatly surprised that the amount of Australians who make minimum wage is so high. One in four workers being paid as little as is legally possible seems egregious.

The wage increase was intentionally kept to something equivalent to current inflation. Over the last 2 years increases have totalled around 10%. The FWC argument is that we now need to improve productivity to justify an increase beyond a basic inflation catch up.

The proportion of workers on the minimum wage surprised me too.

Then again, the Aus minimum wage is relatively high compared to most countries. Aus has the fourth highest minimum wage in the OECD - effectively the fourth highest in the world based on purchasing power.

Real minimum wages

OECD.Stat enables users to search for and extract data from across OECD’s many databases.

stats.oecd.org

OB

 

[Nithavela]

The wage increase was intentionally kept to something equivalent to current inflation. Over the last 2 years increases have totalled around 10%. The FWC argument is that we now need to improve productivity to justify an increase beyond a basic inflation catch up.

The proportion of workers on the minimum wage surprised me too.

Then again, the Aus minimum wage is relatively high compared to most countries. Aus has the fourth highest minimum wage in the OECD - effectively the fourth highest in the world based on purchasing power.

Real minimum wages

OECD.Stat enables users to search for and extract data from across OECD’s many databases.

stats.oecd.org

OB

Germany isn't that far behind on that chart, and only about 6.4% of workers make minimum wage. Even the percentage of workers making less than 14 Euros per hour (2 Euros above minimum wage) is at 23% and thus lower than the amount of workers making minimum wage in Australia. (Numbers are for last year, the minimum wage got increased this year, though only at about inflation rate)

Jeder vierte Beschäftige verdient weniger als 14 Euro in der Stunde

In Deutschland verdient etwa jeder vierte Beschäftigte kaum mehr als den Mindestlohn. Der Co-Vorsitzende der Linksfraktion, Bartsch, warnte vor Altersarmut und sprach von einem zu geringen Lohnniveau.

www.tagesschau.de

(Sorry for the german link, google translate it, the numbers are in the first few paragraphs.)

 

[Occams Barber]

Germany isn't that far behind on that chart, and only about 6.4% of workers make minimum wage. Even the percentage of workers making less than 14 Euros per hour (2 Euros above minimum wage) is at 23% and thus lower than the amount of workers making minimum wage in Australia. (Numbers are for last year, the minimum wage got increased this year, though only at about inflation rate)

Jeder vierte Beschäftige verdient weniger als 14 Euro in der Stunde

In Deutschland verdient etwa jeder vierte Beschäftigte kaum mehr als den Mindestlohn. Der Co-Vorsitzende der Linksfraktion, Bartsch, warnte vor Altersarmut und sprach von einem zu geringen Lohnniveau.

www.tagesschau.de

(Sorry for the german link, google translate it, the numbers are in the first few paragraphs.)

OK... but we have more sunshine (the article translated well- thanks)

OB

 

[Nithavela]

OK... but we have more sunshine (the article translated well- thanks)

OB

Maybe you can get more money if you export more coal to china.

 

[Occams Barber]

Maybe you can get more money if you export more coal to china.

It's taken years to move towards shutting down our own domestic coal powered power plants. After a decade of denialism by a conservative government we now have a more progressive party in power and things are finally moving. About the only thing we've done well is rooftop solar.

Unfortunately cutting coal exports is going to be a major social, political and economic battle. I fear that as long as there is demand for coal, we will continue to supply the market. We're hugely reliant on coal mining for export income.

OB

 

[Paidiske]

I just read some data saying 36% of Australian households are currently experiencing food insecurity. I wonder whether this will be enough to make any dent in that...

 

[Occams Barber]

I just read some data saying 36% of Australian households are currently experiencing food insecurity. I wonder whether this will be enough to make any dent in that...

Unfortunately we're caught between a rock and a hard place. If wages were increased more there is a risk the extra spending will push inflation up with a negative impact on mortgage interest rates and rents. We appear to be catching up with wage stagnation and the coming tax cuts may help. Putting the squeeze on Coles and Woollies to shame them into being a little more cautious about price increases may also help.

There seems to be broad agreement among economists that the current minimum wage increase is unlikely to drive inflation, but a bigger increase may put us back on the inflation treadmill.

OB