Australia’s industrial relations tribunal has approved a 5.75 per cent raise in the national minimum wage.
The changes will go into effect on July 1st, the Fair Work Commission (FWC) stated on Friday.
The increase falls between the roughly 4% desired by corporate groups and the 7% increase backed by the Australian Council of Trade Unions.
The FWC stated in announcing the decision that the current economic situation, which includes low unemployment, declining real wages, and rising inflation, “is very unusual and presents a particular challenge in this year’s Review.”
The predicted steep slowdown in economic growth over the coming year, the commission stated in the announcement statement, will present an additional obstacle.
“We have given the effect of the present pace of inflation on the capacity of contemporary award-reliant employees, particularly the poorly paid, to satisfy their fundamental financial necessities a substantial amount of weight in our assessment.
“Inflation is making the real value of these workers’ incomes smaller and putting financial strain on households.”
Data from the Australian Bureau of Statistics show that inflation increased from 6.3 per cent in the 12 months ending in March to 6.8 per cent in the 12 months ending in April.
After the temporary reduction in the government’s fuel excise tax ended, fuel costs rose sharply, which was a significant factor in the jump.
The cost of housing, food, and transportation all increased by over 7% within the same period.
The panel stated that despite the cost-of-living problem, the awarded rise would not preserve the actual worth of the minimum wage or stop the decline in real earnings.
According to it, 5.75 per cent was the maximum that could be justified given the state of the economy.