Australians being paid the National Minimum Wage (NMW) will see an increase of $22.20 per week, or 3.3%, in wages as a result of the Fair Work Commission’s (FWC) annual wage review decision of 6 June 2017.
The NMW will increase from $672.70 to $694.90 per week, or $17.70 to $18.29 per hour. This is an increase of 3.3%, which is more than the 2.4% increase made last year.
The Expert Panel stated that the economy has continued to grow, although slightly below trend, the unemployment rate has been relatively stable, wages growth remained subdued and the current rate of inflation means that the decision poses little risk to the macroeconomic inflationary environment. The Expert Panel determined that these “prevailing economic circumstances provide an opportunity to improve the relative living standards of the low paid and to enable them to better meet their needs.”
The Expert Panel also considered international research, which “fortified [its] view that modest and regular wage increases do not result in disemployment effects.” Further, the Expert Panel noted that the research suggests “that the Panel’s past assessment of what constitutes a ‘modest’ increase may have been overly cautious, in terms of its assessed disemployment effects.”
The minimum wage rates contained in modern awards will also increase by 3.3%, with weekly wages being rounded to the nearest 10 cents.
The changes come into effect on 1 July 2017.
What does this mean for employers?
Employers that pay the national minimum wage or in accordance with a modern award will need to increase wages from 1 July 2017.