Workers lining up for biggest pay boost in 12 years but it still won’t match inflation

The wage of about 40 per cent of Australia’s workforce could be boosted by a 4.5 per cent increase when the Fair Work Commission hands down its annual wage review in coming weeks.

May 26, 2022, updated May 27, 2022

An increase of that size would be the biggest in 12 years, but would still be behind the inflation rate of 5.1 per cent, a figure that was expected to grow to 6 per cent before the end of the year.

ANZ Bank senior economist Catherine Birch said even at the predicted size of the increase it would still represent a cut in real wages and this was more likely to impact women and younger workers as well as those in sectors like hospitality, health and retail.

The increase would equate to between 81 cents and 91 cents an hour from the current rate of $20.33 an hour. This would be less than the increase argued by the ACTU of 5.5 per cent but greater than that submitted by business (2.5 to 3 per cent).

Birch said workers on individual arrangements were already experiencing wage growth while those on the award system and enterprise agreements were not.

“This suggests that for younger, female, lower paid workers (the) average wage growth will be slower to pick up and more dependent on the size of the national minimum wage and award wage outcome,” Birch said.

Although the Government does not make the decision relating to the minimum wage, Prime Minister Anthony Albanese has said he would support an increase of 5.1 per cent because workers should not go backwards.

Treasurer Jim Chalmers has said the Fair Work Commission was aware of the Government’s view on the issue.

Although the decision is based solely on the minimum wage and award wages, and ANZ said this was equal to about 25 per cent of non-managerial employees. Workers on enterprise bargaining agreements were also affected.

Birch said about 28 per cent of female workers were on award wages compared with 21 per cent of men.

Almost two thirds of the workers in the accommodation and food sector were on awards.

The average weekly total cash earnings of a male fulltime employee on award wages is $1275.30, well below the $2016.30 for those on collective agreements and $1926.10 on individual arrangements.
Workers in lower paid occupation groups like community and personal service workers (44.5 per cent), labourers (42.3 per cent) and sales workers (34.4 per cent) are also more likely to be on awards.









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