As the cost of living sky rockets, the Fair Work Commission has increased the national minimum wage by 5.2 per cent and pay rates for award-covered employees by 4.6 per cent or $40 a week depending on which is higher by July 1 this year.

The increase is significantly larger than the 2.5 to 3 per cent which had been recommended by employer groups including the PVCA, Ai Group and the Australian Chamber of Commerce & Industry. The Australian Council of Trade Unions (ACTU) argued for a 5.5 per cent increase

In the summary of its finding, the Fair Work Commission said the Annual Wage Review decision means workers on minimum wages will from July 1 receive $812.60 per week or $21.38 per hour, while modern award minimum wage rates above $869.60 will receive a 4.6 per cent adjustment, while wage rates below $869.60 will be adjusted by $40 a week.

The current national minimum wage is $20.33 per hour, or $772.60 per week.

Kellie Northwood, CEO of The Real Media Collective and incoming CEO of the PVCA, said it is still not clear what impact this decision will have on the industry awards for the print and publishing sectors with more information on this expected next week.

But she said the wage increase comes as businesses face significant challenges including paper price rises, supply chain issues and booming energy costs.

“Our members are facing significant challenges across all cost of business levers and this ultimately impacts pricing, communicating the impacts of increased labour costs whilst mitigating paper, consumables and energy costs is an additional pressure point. The priority must be placed on understanding the impacts to our industry specifically and PVCA/TRMC are developing very clear communications for all members to ensure they are well prepared for the 1July implementation in the first instance, as well as assistance across communications into customers and stakeholder groups,” Northwood said.

“Whilst we respect the Commissioner’s decision, we do argue that a more moderate increase would have been more appropriate for businesses, especially the manufacturing sector, recovering from the pandemic and under-going severe talent and skills shortage pressure as well as other supply chain and production costs, particularly energy.

“Whilst we respect the Commissioner’s decision, we do argue that a more moderate increase would have been more appropriate for businesses, especially the manufacturing sector, recovering from the pandemic and under-going severe talent and skills shortage pressure as well as other supply chain and production costs, particularly energy,” Northwood said.

“Next week we will be able to understand the incoming increases to our industry across the Awards we operate within and note in some instances the minimum rates of pay may be able to be absorbed into an employee’s current rate of pay, as long as the result leaves their rate of pay at least equal to the increased Award minimum rates.

“With this in mind, we will be providing information to members across this once the advice has been issued from the Commission.”

The Australian Industry Group (AiG) said the minimum wage increases will further fuel inflation.

“There is a major risk that the 5.2% per cent increase that has been awarded to the National Minimum Wage, with increases of between 4.6% and 5.2% to award rates, will fuel inflation and lead to even higher interest rates; even more hardship for people with mortgages, personal loans or credit card debts; and add substantially to the risk of unemployment and underemployment – particularly for unskilled employees,” Ai Group CEO Innes Willox said.

“The cost increase will be difficult to absorb for businesses that are already struggling to cope with big increases in material and energy costs, interest rate rises, supply chain disruptions and labour shortages.”

The ACTU welcomed the decision to raise wage rates as lack of wage growth continues to be a critical issue for the economy. The union added there are still 8.5 million workers who don’t know where their next wage rise is coming from.

“This Annual Wage Review is one tool we have to generate wage growth, but it only affects one in four workers – we need wage growth across the economy,” ACTU Secretary Sally McManus said.

“Clearly the current system is failing. It is unable to deliver wage increases despite low unemployment, high productivity and high profits. Working people are feeling the serious consequences of nearly 10 years of inaction by the previous government.

“Our country needs to take a fresh look at this problem and address it. It is not acceptable that working Australians and their families continue to go backwards while big business does so well.

“We cannot be satisfied with a wage setting process that leaves minimum wage workers living in poverty and delivers real wage cuts for the average worker.”

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