Unemployed young people will be disadvantaged if the minimum wage is too high, Australia’s peak business body says.
The Australian Chamber of Commerce and Industry (ACCI) has asked the Fair Work Commission to increase the minimum wage by no more than 1.2 per cent, or $7.90 extra per week, making a weekly wage of $664.80.
ACCI spokesperson Patricia Forsythe said the 730,000 Australians out of work, including 250,000 young people, need a “job-friendly” approach to the minimum wage.
“Economic data shows there is spare capacity in the labour market, indicating that many low-paid and low-skilled workers are struggling to find work,” Ms Forsythe said.
“In setting the minimum wage, the Fair Work Commission must avoid impeding access to jobs or training opportunities, which can set people on a path to higher pay later in life.”
Youth unemployment is at 12.2 per cent, Ms Forsythe said, more than double the national unemployment rate of 5.8 per cent.
Ms Forsythe said the lack of wage growth, now at a record low, indicates employers are unable to pay workers more.
“Jobs that use awards are key pathways into the workforce for unemployed young people,” Ms Forsythe said.
“The minimum wage decision has a significant impact on the number of these award-reliant jobs available, so higher minimum wages hurt young people.”
The Australian Retailers Association has also proposed an increase of $7.90, while the Australian Industry Group has wants $10.50 and the Australian Council of Trade Unions is pushing for $30.
“A $30 a week rise for our lowest-paid workers is vital if we’re to halt the alarming slide in living standards that is threatening the economic wellbeing of one in five Australians,” ACTU secretary Dave Oliver said.
The ACCI submitted its proposal to Fair Work on Wednesday, one of 22 submissions from organisations about the forthcoming June wage ruling.
The Fair Work Commission’s decision on the new minimum wage will take effect from July 1.
The Australian Council of Trade Unions (ACTU) has urged the Fair Work Commission to lift the national minimum wage by $30 a week.
The union has lodged its submission as part of the Commission’s annual wage review.
ACTU secretary Dave Oliver said more than 1.8 million of the nation’s lowest paid workers should receive $686.90 a week, or $18.07 an hour.
The current national minimum wage is $656.90 per week, or $17.29 an hour.
“The minimum wage is still sitting around 40 per cent of what average wage earnings are and if this trend continues we could end up with a US-style working poor in this country.”
He said the minimum wage had barely kept pace with inflation.
“This is an insult to every low-paid worker in the country, $10 in an environment where childcare costs are going up, utility costs are going up, education and housing affordability are skyrocketing,” he said.
The ACTU denied that jobs were at risk if wages were increased.
Wage hike should not make work harder to find: industry group
In its submission, the Australian Chamber of Commerce urged the Commission to increase the minimum wage by no more than 1.2 per cent, or $7.90 a week.
Australian Chamber spokesperson Patricia Forsythe said more than 730,000 Australians were out of work, including more than 250,000 young people.
She said any jump in wages should not make it harder for people, particularly youth, to find work.
“Economic data shows there is spare capacity in the labour market, indicating that many low-paid and low-skilled workers are struggling to find work,” Ms Forsythe said in a statement.
“We must be careful that the minimum wage does not exacerbate the risk of unemployment for these workers.”
The Australian Industry Group said the minimum wage should increase by 1.6 per cent, or about $10.50 a week.
Group chief executive Innes Willox said economic growth remained patchy, so a modest increase was needed.
“The panel needs to fully take into account the needs of those whose jobs will be threatened (including many low paid workers) if an excessive minimum wage increase is awarded,” he said.
Low paid workers struggling to make ends meet
Lauren Wilson has worked part-time at a call centre for five years.
“When you are on the minimum wage, you are always one small change away from disaster,” she said.
She said she was often faced with the decision of what to do with her last $40 until payday.
“Do I put it on my myki? Do I spend it on my food? That is the struggle we face,” Ms Wilson said.
Erin Gibbons said as a casual worker on minimum wage she found it hard to plan for the future and that while an extra $30 a week was not much it was a start.
“It’s not uncommon for hospitality workers to work multiple jobs, just to pay for the everyday expenses,” she said.
Henry Rama, 57, said he was struggling to find extra work to supplement his part time cleaning job.
“It’s always a struggle from pay check to pay check” he said.
“I’m still looking for other work but at the moment it is hard to find another job because of my age.”