Minimum wage to rise by 3%

| May 30, 2019

The Fair Work Commission has announced a 3.0% increase to minimum wages with the new national minimum wage to increase to $740.80 per week or $19.49 per hour from 1 July 2019.

CPI rose by 1.3% in the year ending in March 2019, making more than double inflation. This continues the trend of pay rises being above CPI. In 2017 the increase in pay was 3.3% (CPI 2.1%) and in 2018 3.5% (CPI 1.9%). This is an increase of 9.8% over three years, while CPI (inflation) rose just 5.3%.

COSBOA CEO Peter Strong said we understand that people on low wages want more money — of course they do. They are now consistently receiving pay rises above inflation and are better off as a result.

“We also know that the people who have to pay this increase are in the main small business employers, who have also had to deal with other changes including increases in penalty rates, changes to casual and other employment provisions, rising energy costs, and more.

“COSBOA members are aware that small business employers will have to either absorb this pay increase, cut the hours of their staff, or increase the prices of their services and products. Wage rises can only be absorbed if there are productivity gains; otherwise it is the small business family that pays for the rise. Decreasing work hours cancels out the positive impact of a pay rise, and increasing prices of goods and services adds to inflation.

“Another concern is that small businesses with very low margins will be disproportionately impacted by this rise. These include small supermarkets, service stations, bookshops, shoe shops and many businesses in the hospitality sector. Let’s hope that the economy can continue to be healthy so that these types of cost increases are not detrimental to small businesses and therefore to our future.

“This decision also reinforces the need to leave pay decisions to the Fair Work Commission and not to the union movement —  or to employers, for that matter. It debunks the myth that wages have been stagnant while other costs are rising. This will hopefully put to rest the rubbish story of a ‘jobs crisis’ as espoused by the unions during the election campaign.”