Australia Raises Minimum Wages by 3.5% as Inflation Eases

Yomiuri Shimbun

03-06-2025

Reuters file photo
A woman uses a machine to emboss a wallet in the window of a retail store selling leather goods in central Sydney, Australia, November 15, 2017.
SYDNEY, June 3 (Reuters) – Australia's independent wage-setting body on Tuesday raised the national minimum wage by 3.5% effective July 1, a real wage increase for about 2.6 million workers on the lowest pay as inflationary pressures ease in the economy.
The minimum rate will rise to A$24.94 ($16.19) per hour, resulting in an extra A$1,670 in a year for full-time employees, according to the Fair Work Commission's (FWC) annual review.
Headline consumer price inflation held at 2.4% in the first quarter, comfortably within the Reserve Bank of Australia's target band of 2% to 3% and having come down from the 7.8% peak in late 2022.
FWC President Adam Hatcher said the decision could help many workers to recoup the loss of their real income over the last few years due to high living costs.
'If this opportunity is not taken in this annual wage review, a loss in the real value of wages which has occurred will become permanently embedded … and a reduction of living standards for the lowest paid in the community will thereby be entrenched,' Hatcher said.
Last year, the FWC increased minimum wages by 3.75% but that was largely in line with inflation.
The Australian Council of Trade Unions (ACTU) described the wage increase as 'a great outcome' for employees on minimum wages, who it said suffered the most when inflation soared after the COVID-19 pandemic.
'Our lowest-paid workers are getting ahead again,' ACTU Secretary Sally McManus told reporters.
The Reserve Bank of Australia cut interest rates to a two-year low last month as cooling inflation at home offered scope to counter rising global trade risks, and left the door open to further easing in the months ahead.
At the same time, the labor market has remained surprisingly resilient, with the jobless rate hovering at 4.1% for over a year now. Employment gains have been driven by a surge in public sector jobs, with still tepid wage growth suggesting few risks of a damaging wage-price spiral.