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How raising minimum wage will impact consumers

By Miriam Webber
Ben McDonald, owner of Capital Food Group, said further wage hikes would mean passing on the costs to consumers. Picture: Keegan Carroll

Raising the minimum wage in line with cost of living would see Canberra businesses passing on the costs to consumers, businesses say.

The snowballing impacts of inflation and labour shortages across the territory have seen small businesses hiking up wages to attract and retain staff for some time, the owner of four Canberra hospitality venues said.

Ben McDonald employs 22 staff across his four hospitality venues, and said further wage hikes would mean passing on the costs to consumers.

"Everything from management down to those on the floor, it's difficult to find, or at least retain," Mr McDonald, the owner of Capital Press Food group said.

"It's not only difficult to get them, the hardest part is almost retention, because businesses are desperate for staff and so they're willing to pay more to maintain staff."

He said where a full-time cafe manager role would once offer $65,000, to be competitive right now that salary would now sit around $72,000 plus super.

Stuck between rising cost of living and a staffing crunch, Mr McDonald said he now employs about 20 per cent more casual workers than pre-COVID.

"Employees want flexibility now because they want to be able to work in multiple spaces and have the flexibility to earn more money elsewhere and work between different jobs," he said.

"There was a time when everyone's goal was to have steady full-time employment. Now that's no longer the case anymore. People want to earn as much money if they can."

The chief executives of the ACT Council of Social Service and ACT Youth Coalition said they had observed low-income earners taking on multiple jobs to keep up with a consumer price index of 5.4 per cent in Canberra.

ACTCOSS acting chief executive Adam Poulter said the organisation had heard reports of people working two or three jobs to try and make ends meet.

"We need to see everyone benefiting from the economic recovery we're seeing in Canberra and Australia more generally," Mr Poulter said, supporting a rise in the minimum wage to match inflation.

"So that we don't leave behind those who are struggling on lower incomes, who may be underemployed who may be doing two or three jobs.

"They also need to benefit and share in that wealth," he said.

Youth Coalition of the ACT chief executive Dr Justin Barker said younger workers were often piecing together several casual jobs to make ends meet.

"The wage growth stuff affects the whole population group but disproportionately affects young people because they're newer into the labour market, have less experience and get paid less."

Canberra Business Chamber chief executive Graham Catt steered clear from setting a direct figure on minimum wage growth, but said many Canberra workers had already seen large percentage increases in their wages.

"Many businesses ... have given people pay increases that are certainly in excess of 5.1 per cent. So, a wage increase of 5 per cent, 10 per cent, or 20 per cent, doesn't actually address the problem they're dealing with, which is we simply haven't got the workers and we can't find the workers."

Noting that of Canberra's 31,499 businesses, only 43 employ more than 200 people, Mr Catt said the territory was in a unique position when it came to wage hikes.

"If we add more and more costs to the bottom line for business, ultimately there's no choice but to pass it on to the customer [increasing cost of living]."

But Mr Poulter said people on low incomes spent the most on essentials, and wage hikes would be imperative for them.

"It's really important that they get a fair wage that will allow them to be able to afford the basics in their life and be able to turn up to work in a healthy state.

"While it may be hard for a business to pay those wages, it's something that they should do, something they need to do and ultimately, it's got to be in their best interest to pay their employees fairly, and have them turning up to work, able to work at their best."

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Dive Deeper:
Will lifting the minimum wage worsen inflation and raise interest rates?
Wages have become the latest battleground in the election, with debate raging about how much extra workers can get paid…
How does Albanese’s wages plan impact jobs, inflation and poverty? We ran the numbers
Extra cash in wage earners’ pockets will increase inflation but also help them handle higher inflation. It’s a matter of…
Wages stoush continues as pressures bite
The war over wages growth continues as workers struggle to keep up with the cost of living as real wages…
Eden-Monaro faces rising cost-of-living pressures and worker shortages as it prepares for election
Businesses and support services in the NSW electorate of Eden-Monaro say they are struggling to cope with scarce, expensive housing…
One subscription that gives you access to news from hundreds of sites
Wage rise spike fuel to inflation fire: PM
The government and opposition are trading barbs over wage rises after Labor called for a pay rise in line with…
Leaders' debate: Albanese wins final debate, Morrison confirms Tudge will re-enter cabinet if re-elected
Anthony Albanese wins the third leaders' debate which saw he and Scott Morrison cover well-trodden issues, but also the Prime…
Get all your news in one place