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Daily Mail
4 days ago
- Business
- Daily Mail
EXCLUSIVE How a 'DOUBLE' pay rise is on its way for millions of Aussie workers next year
Low-paid Australian workers could be getting a huge 'double' pay increase of more than seven per cent in 2026 - with the likes of dry cleaners and restaurant staff to be the key beneficiaries. A major employer group has warned the potential pay spike could threaten the jobs of low-skilled workers, given it would follow the Fair Work Commission awarding a 3.5 per cent pay rise to 2.9million workers beginning on July 1 this year. That latest increase applies to workers on awards and the 200,000 Australians on the minimum wage. But a hidden clause in the industrial umpire's decision proposed scrapping a key employment classification, which could come into effect in July 2026. This would automatically grant a 3.6 per cent pay rise to the very lowest paid, regardless of the following annual wage review decision - because these workers will be moved on to a higher pay grade. This pay rise would also be on top of what the commission decides for an upcoming minimum wage increase in 2026-27. If it matched this year's 3.5 per cent increase, it would mean low paid workers are in line for a double-up pay increase of 7.1 per cent. Employer groups have warned the series of pay rises could lead to job cuts. But Tim Kennedy, the national secretary of the United Workers Union which represents the likes of cleaners and hospitality workers, said the minimum wage rise was about helping the lowest paid to survive. 'When workers can't afford rent, food or petrol, the wage floor is clearly too low,' he told Daily Mail Australia. 'The decision is a lifeline, but we'll continue fighting until wages are genuinely liveable for everyone.' Professor John Buchanan, a labour market researcher at the University of Sydney, told Daily Mail Australia the Fair Work Commission had a 'very timid' approaching to making wage decisions. 'They are very keen to ensure that their decisions are not seen as irresponsible and potentially behind a jacking up or a prolonging of high interest rates,' he said. 'The minimum wage and the awards system is about what kind of civilisation we are. 'Wages policy isn't just about economic efficiency and equations in an econometric model. 'This is the signal we send to ourselves and our society about how we treat the most vulnerable in the labour market and by having a wages structure that ensures those at the lowest reaches can live some semblance of a decent life.' Australia's 200,000 minimum wage workers on the existing C13 classification will be getting $24.95 an hour from July 1, following the latest increase. Their weekly pay is going up by $32.10 to $948, which translates into a $1,669.20 annual increase for those putting in a 38-hour week. Those working full-time on the lowest pay will be getting $49,296 a year from next month. There is a 3.6 per cent gap between the C13 classification, which the Fair Work Commission wants to scrap, and the better paid C12 classification, which those on the minimum wage could be transferred on to in July 2026. Workers on the C12 classification will be getting $25.85 a hour from July 1 this year. That equates to $982.20 a week or $51,074 a year. Minimum wage earners, now on $24.10 an hour or $915.90 a week, would effectively have enjoyed a 7.3 per cent wage increase in four weeks' time had the C13 classification been scrapped immediately. The Australian Industry Group's chief executive Innes Willox said the Fair Work Commission's proposed classification change for those on the minimum wage would threaten jobs. 'This would impose major cost increases on many thousands of employers in the hospitality, restaurants, clubs, horticulture and pastoral industries,' he said. 'There is simply no justification for such a large increase in minimum wage rates for kitchen hands, glassies, farm hands, hotel cleaners and similar low-skilled jobs, on top of the annual wage review increase that would also apply. 'Such a move would threaten the livelihoods of many business owners and the jobs of many workers.' But Prof Buchanan said a big wage rise for the lowest one per cent of workers, on the minimum wage, was hardly unreasonable. 'I've been studying, following wages policy now, professionally, since 1985 and I can't remember a time when any employer group ever has said, "This is a sound wages decision",' he said. 'If we had been listening to them for 40 years, people would be living on poverty wages - they basically cry wolf so many times, they lose all credibility when they make that point.' ACTU secretary Sally McManus said lower-paid Australians deserved to be valued at work. 'We welcome the Fair Work Commission's recognition that the real value of award wages should be restored, particularly for lower-paid Australians,' she said. 'Feeling more valued at work creates the working conditions for more productive businesses and a more resilient economy.' A change in classification would affect workers on awards covering manufacturing, hospitality, restaurants, clubs, horticulture and dry cleaning and laundry. Minimum wage workers received an 8.6 per cent pay increase in July 2023 when the old C14 classification was scrapped and something similar could happen in July 2026. The latest 3.5 per cent increase was well above the 2.4 per cent headline inflation rate and above the overall 3.4 per cent increase in wages for all Australian workers in the year to March.
Daily Mail
7 days ago
- Business
- Daily Mail
Millions of Australian workers to secure 3.5% pay rise
Australia's 2.9million workers on awards have been given a 3.5 per cent increase that's well above inflation to help them deal with years of wages failing to keep pace with the cost-of-living crisis. The Fair Work Commission's increase, coming into effect on July 1, was above the headline inflation rate of 2.4 per cent and in between what was sought by employers and unions. But the annual wage review decision, affecting many low-paid workers, marked the weakest rise since 2021, when a 2.5 per cent increase was awarded and was less than last year's 3.75 per cent increase. It takes the full-time minimum weekly wage to $948, marking a $32.10 rise, as the minimum hourly pay goes up by 85 cents to $24.95. The decision will affect 2.7million Australians, or one in five workers, who are employed under one of 121 awards, along with the 180,000 people on the minimum wage. Low-paid workers in the retail, hospitality, healthcare and administrative support sectors are the key beneficiaries. Fair Work Commission president Adam Hatcher delivered the industrial umpire's decision at 10am on Tuesday, noting the low-paid are 'disproportionately female' and had suffered cuts in real wages adjusted for inflation until recently. 'The principal consideration, which has guided our decision, is the fact that since July 2021, employees who are reliant on modern award minimum wages or the national minimum wage have suffered a reduction in the real value of their wage rates,' he said. 'This reduction in real modern award wages and the national minimum wage has been a result of the spike in inflation which commenced in 2021 and peaked in late 2022. The result has been that living standards for employees dependent on modern award wages have been squeezed and the low paid have experienced greater difficulty in meeting their everyday needs.' Justice Hatcher, a Labor appointee, said that while other Fair Work Commission decisions were generous, the industrial umpire had been concerned about a wage-price spiral and had therefore only awarded previous increases in line with inflation. 'The continuation of this inflationary episode has meant that over the last three annual wage review decisions, the Fair Work Commission has repeatedly deferred taking any action to reverse this decline in real wages out of a concern that this might result in the persistence of higher inflation,' he said. The Australian Chamber of Commerce and Industry, the nation's biggest employer group, had argued for a 2.5 per cent increase that barely kept pace with inflation while the Australian Council of Trade Unions had argued for a 4.5 per cent rise. The latest increase is much smaller compared with recent years, given inflation has moderated since reaching a 32-year high of 7.8 per cent in late 2022. But it is a full percentage point higher than the headline inflation rate of 2.4 per cent. Employment and Workplace Relations Minister Amanda Rishworth said the Fair Work Commission decision was responsible, after the government argued for an increase that was above inflation that would give workers a meaningful real wage rise. 'Our government believes that workers should get ahead with an economically sustainable real wage increase,' she said. 'A real wage increase provides further relief to our lowest paid workers who continue to face cost-of-living pressures.' Under Labor, the minimum wage went up by 8.6 per cent in 2023 as awards rose by 5.75 per cent, which had been the biggest increase since 1990. This followed a 5.2 per cent increase in 2022 that at the time had been the highest increase in the minimum wage since the mining boom in 2006. The headline and underlying rates of inflation are now within the Reserve Bank of Australia's two to three per cent target, giving it room to cut interest rates. This is something the Fair Work Commission noted. 'The Reserve Bank of Australia's assessment that inflation has sustainably returned to its target range of two to three per cent indicates that this inflationary episode is now over,' Justice Hatcher said. 'That provides us with an opportunity to go at least some of the way towards correcting what has happened over the last four years by awarding a real increase to modern award wages and the national minimum wage. We are concerned that if this opportunity is not taken in this annual wage review, the loss in the real value of wages which has occurred will become permanently embedded in the modern award system and the national minimum wage, and a reduction in living standards for the lowest paid in the community will thereby be entrenched.' With unemployment still low at 4.1 per cent, workers outside of awards have more leeway to bargain for higher wages. But weak productivity also means wage increases have to be passed on to customers, potentially feeding into inflation. The Australian Industry Group's chief executive Innes Willox slammed the latest 3.5 per cent increase in awards and the minimum wage at a time of weak productivity growth.
