Fair Work Commission announces 3.75% minimum wage increase

The Fair Work Commission (FWC) has announced a 3.75% increase in the national minimum wage for employees from 1st July.

Factoring in current economic conditions with long-term goals such as closing the gender pay gap, the Commission’s new National Minimum Wage will rise to $24.10 an hour for full-time workers.

Announcing the results of the 2024 Annual Wage Review yesterday morning, the decision means full-time workers will see a pay increase of approximately $33 a week to $915.91, based on a 38-hour working week.

Modern award minimum wages will also rise by 3.75%, a decision affecting the roughly 20.7% of Australian workers covered by 121 award wages, some 2.6 million employees. Affected workers are more likely to be low-paid, casual, and women employees than the overall workforce.

The annual wage decision from the workplace umpire comes as cost-of-living pressures linger.

FWC bench president Adam Hatcher said the increase factored in these pressures and the recommendations of unions and industry lobby groups.

He said that the FWC did not want to award an increase significantly above inflation and the 3.75% rise factored in the upcoming stage three tax cuts, superannuation guarantee increase and budget cost-of-living measures.

This year’s increase comes after a significant rise last year - 8.65% for the national minimum and 5.75% for awards.

Despite fears that the largest increase in a decade could further stoke inflation, there has been no wage-price spiral, and annual inflation has fallen to 4.1% in the March quarter after peaking at 7.8%.

Ahead of this year’s decision, industry groups had announced their preferred increases: the Australian Council of Trade Unions called for 5%, the Australian Industry Group wanted 2.8%, and the Australian Chamber of Commerce and Industry suggested a 2% lift.

The Council of Small Business Organisations Australia had said that the minimum wage should not rise any more than 3% as small businesses slog through a “cost of doing business crisis”.

In contrast, the peak union body argued for a higher pay rise than industry lobby groups, arguing cost-of-living pressures are continuing to hit those on the lowest incomes hardest. The ACTU also said that workers in key feminised industries should receive a 9% pay rise.

The Commission also laid out a program for the resolution of gender undervaluation issues in certain modern awards, identifying priority areas for attention.

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