Australia’s Minimum Wage Was Bumped Up in 2021 — But Not by Much

Back in 2021, the national minimum wage wasn’t at all a vibe. This is because, on July 1, the Fair Work Commission raised it from being $19.84 an hour to $20.33 an hour. That’s right, the minimum wage only went up a measly 2.5%.

Australians on the lowest salaries received an additional $18.80 per week. This meant that full-time workers on the minimum got $772.60 per weekly pay packet, up from $753.80 for a 38 hour work week before tax.

This increase took the annual salary of Australia’s 2.3 million minimum wage workers from $39,204 to $40,172, pre-tax.

Now, let’s compare this to 2022’s national minimum wage. The amount of dollarydoos folks could receive from this scheme significantly increased. After receiving some pressure from the newly appointed Labor government, the Fair Work Commission upped the minimum wage from being $20.33 to $21.38. In terms of percentages, this wage scheme raised by 5.2%. 

Individuals being paid the minimum wage started getting $812.60 each week. Moreover, this additional $40 every work week was a huge deal. As Labor’s Ged Kearney stated in a tweet, “This $40 a week increase is the difference between buying fresh veges for the kids, being able to afford train tickets, and paying the bills on time.”

But back to 2021. Here’s why the minimum wage was barely raised that year and some of Australia’s reactions to this decision: 

The Fair Work Commission’s Defense

When announcing 2021’s changes, the Fair Work Commission President Iain Ross claimed that while Australia’s economy was recovering from the COVID knockout, there were still a bunch of potential risks that meant the minimum wage couldn’t rise too much.

“In particular, the risks of domestic outbreaks and of ongoing disruptions to other major economies. The pace of the vaccine rollout also remains a risk,” he said.

“But we have not applied a direct quantifiable discount to the minimum wage increase.

“Last year, the panel awarded a 1.75% increase. The markedly better economic environment… has been taken into account. Taking all of the considerations into account, they weigh in favour of a higher increase than was awarded in last year’s decision,” Justice Ross said.

‘Extremely disappointing’

In 2021, unions were calling for a 3.5% increase to the minimum wage — or an extra $26 per week — but the Morrison Government warned against a major rise, arguing it could worsen employment capacity in small business during the pandemic.

Following the announcement from the Fair Work Commission, The Australian Council of Trade Unions secretary Sally McManus said the 2.5% increase for 25% of the workforce was due to unions fighting for it.

“This wage increase has come about because of unions, the Morrison Government and big business wanted pay cuts or freezes,” she said.

“However, it is extremely disappointing that the Commission has delayed increases for any workers — but especially those who have worked throughout the pandemic and whose employers have posted record profits.

“Wage suppression in our country needs to stop. Suppressing wages hurts the economic recovery and it hurts working people, their families and communities. There can be no economic recovery without a wages recovery”.

Despite historic record economic growth in the country, Australian wages have remained somewhat stagnant.

Since 2013, Australia’s wage growth has been less than half the OECD average, according to Jim Stanford at the Australia Institute’s Centre for Future Work.

Professor for Employment Relations at Griffith University David Peetz said that the loss of worker power due to declining unionisation over the past three decades has played a significant role in the lack of real-term wage growth for Aussies.

“Premature and irresponsible”

Major employer groups were unhappy with 2021’s minimum wage increase and had urged the commission to limit the rise to 1.1%, or an extra $8.29 per week.

Australian Chamber of Commerce and Industry chief executive Jenny Lambert said the commission’s decision would hurt small businesses the most.

“Australians who have managed to battle on through, keep their business afloat and keep people in work now face a highly risky hike in wages — always their biggest cost,” she said.

“Employers and employees have worked hard over the last 12 months to keep our economy moving. ACCI supported a 1.1% increase which would have maintained the real value of wages and been fairer, less risky and more reasonable for everyone”.

Lambert said the Victorian lockdown was evidence of how unpredictable business conditions remain and that the international border closure was still damaging tourism, education and agriculture.

“That’s why a 2.5% increase to award wages now is premature and irresponsible.”

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