Australia’s peak union body has called for a flat $30 a week minimum wage increase for the lowest paid workers but business groups want just a $10.50 a week rise.
The Fair Work Commission is conducting its annual review to set minimum wage levels, with changes to take effect from 1 July.
In submissions, the Australian Council of Trade Unions (ACTU) asked the review to increase the minimum wage for full-time adults by $30 a week, to $686.90 a week or $18.08 per hour.
That represents a 4.6% increase for Australia’s lowest paid. The ACTU suggested that workers on higher classifications should receive a 3.9% increase.
The ACTU argued the 1.86 million Australian workers who are paid the minimum wage or the lowest award rates “lack bargaining power, and rely on increases granted as part of the annual wage review to improve their living standards”.
“Most of those workers are women (57.5%) and most of them are adults (84.5%). These workers are all paid the lowest wage that they may legally be paid.”
The ACTU submission noted the Australian economy grew 3% in 2015 and labour productivity continues to grow strongly.
Australian Industry Group (Ai Group) called for a modest minimum wage increase of 1.6%, or $10.50 a week for the lowest paid and $12.25 at the lowest level in trades.
The Ai Group chief executive, Innes Willox, said it had reached the position based on the fact economic growth remains patchy across sectors and locations, inflation is low, and wage growth fell to its lowest annual growth rate on record in December 2015.
He also cited “Australia’s lack of global competitiveness and very high minimum wage compared to other comparable countries” and the fact more than 2 million people are unemployed or underemployed.
United Voice union took a different approach, advocating the minimum wage panel should instead set a medium-term five-year target. The minimum wage could be targeted at a set proportion of average weekly earnings so the lowest paid did not fall behind.
The proposal would move away from considering annual increases in isolation to consider the longer term trend of the minimum wage.
It argued over a long period Australia’s lowest paid workers have fallen behind as minimum wages have failed to keep pace with average incomes in the economy more generally.
“As this has happened, inequality has risen, and the incidence of low-paid work has increased. Australia is losing its distinctive, egalitarian, minimum wage,” it argued.
The federal government has not made submissions to the review. State governments in Victoria, South Australia and Western Australia made submissions which did not recommend a particular amount for minimum wage rises.
Last year the Fair Work Commission ordered a minimum wage rise of 2.5% or $16 a week, after unions asked for $27 a week.
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