Fair Work Commission Approves 3.75% Increase in Minimum Wage
The Fair Work Commission (FWC) has announced that Australia’s minimum wage and award wages will increase by 3.75 per cent starting from July 1. This decision will see the national minimum wage rise to $24.10 per hour and $915.91 per week for a full-time, 38-hour working week. The change represents an approximate $33 weekly increase to the current minimum wage and is set to affect around 2.6 million workers—equivalent to 20.7 percent of the national workforce.
Impact on Workers
The FWC estimates that this wage increase will impact about a quarter of all Australian employees. The commission emphasised that this adjustment is in line with the forecasted wages growth across the economy in 2024 and is expected to make a modest contribution to the overall wages growth for the year.
“The increase of 3.75 per cent which we have determined is broadly in line with forecast wages growth across the economy in 2024 and will make only a modest contribution to the total amount of wages growth in 2024,” the commission noted. “We consider therefore that this increase is consistent with the forecast return of the inflation rate to below 3 per cent in 2025.”
Broader Economic Effects
The FWC stated that the increase would have a limited effect on the broader economy, noting that employees relying on modern award minimum wage rates are significantly different from the entire Australian workforce. These workers are more likely to be part-time, predominantly women, and nearly half are casual employees. Additionally, they are much more likely to be classified as low-paid.
“In delivering its decision, the FWC said living standards, higher living costs, and workforce participation were major considerations in determining the increase to the minimum and award wages,” the commission explained. “In determining this level of increase, a primary consideration has been the cost-of-living pressures that modern-award-reliant employees, particularly those who are low paid and live in low-income households, continue to experience notwithstanding that inflation is considerably lower than it was at the time of last year’s review.”
Despite the increase, the FWC pointed out that modern award minimum wages remain lower than they were five years ago in real terms. However, the commission deemed it inappropriate to increase award wages by any amount significantly above the inflation rate.
Stakeholder Responses
The decision emerges amid varying perspectives from different stakeholders. The Australian Council of Trade Unions had advocated for a 5 per cent increase in the minimum wage, aligning with inflationary trends pushed by the federal government. Conversely, business groups sought a more modest increment, with the Australian Chamber of Commerce and Industry (ACCI) calling for no greater than a 2 per cent hike, while the Australian Industry Group (Ai Group) proposed a 2.8 percent increase.
The FWC balanced these viewpoints by acknowledging the strong overall labour market and business profit growth, while also noting the less positive outlook in certain industry sectors with a large proportion of modern-award-reliant employees.
“We have taken into account that the labour market and business profit growth overall remain strong, but the picture is less positive in some of the industry sectors which contain a large proportion of modern-award-reliant employees,” the commission said. “We have also taken into account that modern-award-reliant employees will shortly receive the benefit of the stage 3 tax cuts and the budget cost-of-living measures, which are projected to increase real household disposable incomes over the next 12 months.”
