01 June 2016
by Noel Towell

Minimum wage ruling fails to please anybody

Childcare worker Cassandra Duff will be affected by today's annual wage review.

No one in Canberra in 2016 will be saying no to a pay-rise, especially if they are on the minimum or award wages.
For Cassandra Duff and her early childhood educator colleagues, there was little to cheer about in the 2.4 per cent rise, with the childcare centre director saying that 2.4 per cent of not much is, well, not much.


Australia's 1.8 million lowest-paid workers will be awarded a minimum wage rise of extra $15.80 a week, with the Fair Work Commission ruling on Tuesday that the national minimum wage will become $17.70 an hour, or $672.70 a week, from July 1.

But Ms Duff said the ruling would be cold comfort for her and her colleagues who will continue to struggle to live on the sector's notoriously low wages.

"Everybody in our field always welcomes any kind of rate increase, but $15.80, which after inflation and everything works out to be $6.00," Ms Duff said.
"You can't get anything for an $6.00, it doesn't help my educators who are struggling to pay rent or pay bills.

"We're not having luxury holidays, we're not buying houses, we're struggling to pay rent and the bills."

The decision has disappointed trade unions, which had been calling for a $30-a-week increase to halt what they called an alarming slide in living standards of the nation's lowest-paid.

Australia's influential employer groups hoping for a smaller lift of less than 2 per cent were also angered by the above-inflation pay rise, warning it could force job cuts.

The commission's full bench, headed by president Iain Ross, said Australia's "robust" economic climate provided a good opportunity to help employee households that had "low or very low disposable incomes".

Justice Ross said women were over-represented among the country's lowest-paid workers who relied on award rates, and the new increase would "provide some assistance in addressing the gender pay gap".

From July, the increase will flow directly to more than 800,000 workers, and will also lift the pay packets of another 1.1 million Australians whose wages are set by modern awards – the pay and conditions safety nets for different occupations.

Some of the nation's biggest business lobbies were highly critical of Fair Work's decision, saying the increase was "out of step" and would put upward pressure on wages.

The Australian Industry Group said the 2.4 per cent rise would be a major impost on business at a time when the economic environment was "difficult, risky and uncertain".

"There is a clear risk that the decision will be to the particular detriment of people currently out of work and part-time employees hoping to secure additional hours," Ai Group chief executive Innes Willox said.

"With jobs growth slowing and unemployment and underemployment remaining at unsatisfactory levels, a more modest wage increase would have reduced the risks of adverse employment outcomes."

Retailers called Tuesday's minimum wage rise "unimaginable", warning it could cause devastating damage to retailers struggling to get by.

The Australian Retailers Association, which had called for an increase of no more than $7.90, said the ruling meant the pay rate for shop assistants would increase to $19.44 an hour.

"Retailers and young Australians have been reliant on pay rates to enable retail to bring on low-skilled young staff and increase their skill levels, reducing youth unemployment," association executive director Russell Zimmerman said.

The Australian Council of Trade Unions said the minimum wage rise was "not enough" to close the gap between average and minimum wage earners.

"We are disappointed in the missed opportunity to truly narrow the gap between the minimum wage and average earnings – now would have been the ideal time to lift the minimum wage," ACTU secretary Dave Oliver said.

Mr Oliver also attacked the Turnbull government for failing to strongly advocate for a rise in the minimum wage.