Australia's lowest paid workers to get pay rise of $22.20 per week from July 1

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strawberry pickers
Farm workers pick strawberries in the early morning fog on a farm in Rancho Santa Fe, California, United States August 31, 2016. Reuters/Mike Blake

Australia's lowest paid workers have been awarded a $22.20 per week salary increase by the Fair Work Commission. The pay rise will take effect from July 1.

A commission full bench led by president Iain Ross said the minimum wage must be lifted by 3.3 percent from $17.70 to $18.29 per hour. The new national minimum wage will soon be $694.90 per week.

The amount is half the rise unions sought and more than double the amount suggested by employers. The Australian Council of Trades Union sought a $45 rise per week. That was nearly three times the $15.80 per week increase that flowed through to 1.8 million workers in 2016.

Ross said the gradual improvement in the Aussie economy has become an opportunity for the commission to “improve the relative living standards of the low paid.” He explained that the commission has been anxious that pay rise might discourage employers from hiring additional workers.

He believes the $22 wage hike struck the right balance. However, some businesses have slapped the decision and called it “devastating,” warning that salary increase would significantly impede the growth of employment. Business groups wanted to limit the increase to $8 to $10 per week.

Russell Zimmerman, executive director of the Australian Retailers Association, argued retailers were already facing a difficult operating environment. He said the pay rise would be tremendously harmful to the growth and stability of the Australian retail industry.

Zimmerman pointed out that the recently announced minimum wage increase will repress the benefits achieved by the penalty rates reduction. He warned it would also have negative affects in trading hours for retailers and would further delay employment growth across the sector.

But Ross maintained that the level of increase they have decided upon is unlikely to have any measurable negative impact on employment. He also believes the decision would not result to inflationary pressure.

Meanwhile, the Australian Catholic Council for Employment Relations said the pay rise was "woefully inadequate.” Acting chair Tony Farley said families with low income will still simply not acquire enough for their kids and lead a “fulfilling, enriching life.”

Ross recognised that the pay rise would not lift all workers on the minimum wage out of poverty, specifically single parents. "It will, however, mean an improvement in the real wages for those employees who are reliant on [the minimum wage] and an improvement in their relative living standards," he said per ABC.

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