Wage decision risks hours and jobs

06 Jun 2017 |

The significant increase in the minimum wage and award rates announced today risks the job prospects of vulnerable people in the labour market and puts pressure on small and award-reliant businesses facing increasing competition, the Australian Chamber of Commerce and Industry said today.

In its Annual Wage Review, the Fair Work Commission raised the minimum wage by 3.3 per cent, equating to $22.20 per week, bringing it to $694.90. The Australian Chamber sought an increase of 1.2 per cent, recognising that the economy is still finding its feet following the mining investment boom.

Jenny Lambert, the Australian Chamber’s Director of Employment, Education and Training, said:

“More than 744,000 Australians are looking for work, and among those finding it most difficult are young people, first-time job seekers, people with low skill levels and long-term unemployed people. These are the people whose job prospects are most at risk from minimum wage increases beyond what is affordable for small and award-reliant business.

“A person’s first job is often a stepping stone to further opportunity, but right now youth unemployment and underemployment stands at more than 30 per cent. Two-thirds of low-paid workers can expect to move to a higher paying job within a year, when they can expect a 58 per cent increase in hourly wages.

“The award-reliant businesses that must pay the minimum wage increases are major employers of young people. These employers include retailers, whose number of employees and hours worked is in decline as they face increased competition from online businesses with lower operating costs.

“The union argument that significantly increasing award wages will be good for business by putting more money in the hands of consumers ignores the fact that the businesses we are trying to support are the ones who will have to pay the higher wages.

“These small businesses have limited ability to pass on the expense to consumers, and so are forced to reduce costs through cutting jobs or other investments in their business.

“Wage rises across the rest of the economy have been far lower than this figure, which means the Commission has put a greater burden on the small and medium businesses who rely on awards, making it harder for them to compete.

“More than four in five jobs are created by the private sector, many by small, medium and family-run businesses that pay award wages and provide young people with their first job. We need to help these businesses compete and to help young people into paid employment.”

Jenny Lambert

Director - Employment, Education and Training

P  |  0418 277 919

E  |  [email protected]

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