$1000 a week: Minimum wage set to hit new high
Millions of Australians will see their pay increase next month following a decision handed down by the Fair Work Commission (FWC) this morning.
From July 1, around 2.8 million workers will receive a 4.75% pay rise in line with the Commission's latest adjustment to minimum wage rates for modern award earners.
Around 100,000 of the country's lowest-paid workers will get an even larger boost though (5.97%), that will also apply from July.
For full-time workers on the minimum wage, the result means that their earnings will rise from $24.95 per hour to $26.44 per hour.
For the first time, weekly minimum wages will edge above the $1000-mark, with full-time workers set to receive $1004.90 for a 38-hour week (up from $948).
"Australia's lowest paid workers will be pleased with the Fair Work Commission's decision to provide a 4.75% minimum wage increase," says Matthew Dickason, chief executive at Hays APAC.
"Lower-income workers in Australia have been disproportionately affected by limited wage growth, according to data from the Hays Salary Guide, with 62% earning less than $79,000 reporting little to no meaningful salary growth.
"That compares with 36% of those earning above $80,000."
Balancing act
Fair Work Commission president, Justice Adam Hatcher, described this years' determination as "particularly challenging" because of the complexity of the economic landscape.
On the one hand, an uptick in inflation, subsequent rate hikes, and the fallout from the conflict in the Middle East, has added to the broader risk of a slowdown.
On the other, the Commission considered the fact that many low-income workers are still behind where they were in 2021, in real wage terms.
On that point, Hatcher noted that, given the RBA is forecasting a headline inflation rate of 4.8% for the year to June, a wage increase over 5% would have been needed to close the real wage gap.
"Taking into account all of these matters, we have concluded, regrettably, that it would not be practicable or responsible in the current uncertain circumstances to award a real wage increase for employees reliant on modern award wage rates that would be sufficient to close the real wage gap entirely.
"However, we consider that we should at least ensure that modern award reliant employees generally are not worse off in real terms than they were as at 1 July 2025, and that we should also take additional measures to protect the position of the very lowest-paid workers under modern awards."
How has the decision been received?
Predictably, the response to today's decision from advocacy groups representing workers and businesses has been mixed.
David Alexander, chief of policy and advocacy at the Australian Chamber of Commerce and Industry, said that many businesses will struggle to deal with the cost of higher wages.
"Today's decisions further delink wage outcomes from productivity, and economic activity will suffer as a result.
"For businesses that are already struggling with interest rate hikes, high inflation and high fuel prices, this decision putting up wage costs will only add to the burden."
In contrast, Sally McManus, secretary of the Australian Council of Trade Unions, welcomed the news and said that the increase would ensure that workers wouldn't have to cut back on essentials.
"This is a positive real wage increase, and it will provide some buffer against the worst impacts of the Trump war, providing it doesn't drag on throughout the year.
"The lowest paid need to spend almost all of what they earn to survive, and this wage increase will be vital to them while generating income for local businesses that also need a boost."
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