The Fair Work Commission (FWC) in Australia has announced an increase of 5.75% in the minimum wage, starting from July 1, to assist individuals grappling with the escalating cost of living.
As per the FWC decision, the lowest-earning workers will receive A$22.61 ($15.34) per hour, up from the current minimum wage of A$21.38. This adjustment will impact over 2 million workers across the country.
“The wage increases we have determined are the most suitable in the current economic circumstances,” stated the FWC. “We have given considerable consideration to the impact of current inflation on the income requirements of the modern workforce, particularly those with lower earnings who rely on meeting their basic financial needs.”
Nevertheless, some economists express concerns about the sharp increase in wages. They fear it could establish a benchmark for wage expectations and pose challenges for the Reserve Bank of Australia (RBA) in its efforts to bring inflation back within the target range of 2-3%.
Despite the recent quarter witnessing a decade-high overall wage growth of 3.7%, it fell short of expectations. RBA Governor Philip Lowe cautioned that sluggish productivity growth poses a risk to wages, highlighting the need for comprehensive considerations beyond wage increases.
The decision to raise the minimum wage reflects ongoing efforts by Australian authorities to address the rising cost of living, providing relief to low-paid workers who face financial challenges in meeting their essential needs. By adjusting the minimum wage, the FWC aims to strike a balance between supporting workers and ensuring the overall stability of the economy.
The increase in the minimum wage will go into effect on July 1, bringing a ray of hope for millions of workers striving to cope with the mounting costs associated with daily living expenses.