$32 a week: Millions to benefit from pay rise

More than 2.6 million workers will receive a pay rise above inflation in the following months as a result of an announcement by the Fair Work Commission (FWC) this morning.

As part of its 2025 Annual Wage Review, the FWC revealed that the National Minimum Wage, as well as minimum wage rates related to many modern awards, will rise by 3.5% on July 1.

That's above the current rate of annual inflation, which the Australian Bureau of Statistics clocked at 2.4% for the 12 months to April in its latest Consumer Price Index.

The ruling means that roughly 20% of all Australian employees will see their earnings boosted to $24.95 an hour (up from $24.10), or $948 for a 38-hour week (up from $915.90).

Living standards 'squeezed'

Justice Adam Hatcher, the president of the Fair Work Commission, noted that one of the major considerations behind the decision to hand down a 3.5% rise was the decline in real wages that many workers have suffered over the last four years due to inflation.

"The continuation of this inflationary episode has meant that, over the last three Annual Wage Review decisions, the Fair Work Commission has repeatedly deferred taking any action to reverse this decline in real wages out of a concern that this might result in the persistence of higher inflation.

"The result has been that living standards for employees dependent on modern award wages have been squeezed and the low paid have experienced greater difficulty in meeting their everyday needs."

This year was different though, with Justice Hatcher stating that the FWC was satisfied that the 3.5% wage increase was sustainable.

In fact, the Commissions' concern was that if the opportunity to provide a real wage increase wasn't taken, the recent reduction in living standards would become entrenched.

Mixed reaction

Unsurprisingly, the response from employer and employee advocates to today's Fair Work Commission decision has been a mixed bag.

National employer association, the Australian Industry Group, had proposed a 2.6% wage increase in a submission made in the lead up to the decision.

In the wake of today's announcement, chief executive, Innes Willox, has argued that the 3.5% increase will see private sector investment suffer as employers search for the funds to cover the wage rise.

"While Ai Group supported a moderate increase in real award wages reflecting cost of living concerns, 3.5% combined with the additional 0.5% superannuation costs employers will face from next month is well beyond what current economic conditions can safely sustain."

On the other hand, the Australian Council of Trade Unions had advocated for a 4.5% boost to the minimum wage. However, Sally McManus, secretary of the ACTU, welcomed the announcement.

"This decision delivers a 1.1% real wage increase, one of the largest real wage increases the Fair Work Commission has awarded.

"This wage increase means those who are paid award wages will start to get ahead again, easing pressure on their weekly budgets and part of the stress that comes from having to cut back on the basics."

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