Retailers have voiced concern over the Fair Work Commission’s decision to raise the national minimum wage by 2.4 per cent, effective from July 1, 2016.
Following the ruling, the minimum wage will increase to $672.70 a week, or $17.70 per hour. For retailers the rate for shop assistants will increase by $17.30 per week to $738.80 per week, or $19.44 per hour.
There are reportedly around 1.86 million Australians who earn the minimum wage , nearly one in five workers.
The Australian Retailers Association (ARA) says it is concerned about the effects the $15.80 a week increase will have on retailers and the broader retail sector.
Russell Zimmerman, executive director of the ARA, said the ARA advocated before the tribunal a “realistic and manageable minimum wage increase” of no more than $7.90 per week for the retail sector.
“Retailers and young Australians have been reliant on pay rates to enable retail to bring on low-skilled young staff and increase their skill levels, reducing youth unemployment. Many small to medium enterprise retailers are reliant on a minimum wage workforce, and the announcement to increase wages during this time of low consumer confidence and low growth will sadly result in further job losses and business closures – a very distressing truth for retailers,” Mr Zimmerman said.
“The minimum wage increase, coupled with weak trade figures and penalty rates, will only cause further damage to retailers who are struggling to keep their heads above water as it is. With nervousness during the election period, weakening retail trade figures and global economic concerns, the retail industry cannot simply keep up with excessive wage increases.
“The ACTU and SDA aren’t about creating jobs and opportunity but they now continue a low productivity/high wages agenda which will only harm retailers and their employees,” Mr Zimmerman said.
Wage rise could force job cuts: NRA
The National Retail Association (NRA) has warned that the Fair Work Commission’s decision to lift the national minimum wage could force job cuts across the retail sector as small businesses struggle to cope with the added financial impost.
NRA CEO, Ian Winterburn, said the awarded increase could unfairly penalise young people, in an environment where youth unemployment was already soaring.
“The NRA proposed a sensible 1.6 per cent increase, which was calculated with regard to the economic trade-offs between factors such as unemployment levels, productivity gains in the sector, business conditions, and the inflation rate as a measure of the increased cost of living,” Mr Winterburn said.
“The 2.4 per cent increase, which is above the current rate of inflation, seems to imply that there is a significant productivity component included in the decision.
“This is contrary to the conditions that are currently being experienced in the retail industry.
“It highlights a fundamental problem with centralised wage fixing decisions, which do not adequately consider the economic conditions that exist in individual industry sectors.
“Our proposal was the same as that of the Australian Industry Group, however, a number of other groups proposed much lower increases.”
Mr Winterburn said the NRA believes its proposal of 1.6 per cent increase would have been a more equitable outcome in the midst of a very challenging economic period.
However, the NRA commended the Fair Work Commission on its decision to reject the Australian Council of Trades Union’s (ACTU) proposed increase of $30 per week, to $686.90 per week or $18.08 per hour.
“We understand that it can be extremely difficult negotiating workplace relations, particularly given the current climate of youth unemployment and lack of consumer confidence, however we were determined to position our sector as a reasonable, sensible alternative to other groups making extremely high or low proposals.
Workers may face “double hit” as penalty rate ruling looms, says union
The ACTU)said that while unions welcome any rise in wages, this increase is less than the 2015 rise of $16 per week and is still not enough to close the growing gap between average and minimum wages.
In its submission to the FWC’s Annual Wage Review, the ACTU argued that minimum wage levels are still stubbornly low, with the resulting impact on inequality raising fears Australia is seeing an increasing US-style underclass of working poor.
The ACTU said there is “worrying potential” for already lower paid workers to receive a double hit to their take home pay if Saturday rates are cut.
“Unions argued for a $30 a week increase in the minimum wage for 1.86 million Australian workers, it’s only through our actions that the wage was lifted at all,” ACTU Secretary Dave Oliver, said.
“However we are disappointed in the missed opportunity to truly narrow the gap between the minimum wage and average earnings – now would have been the ideal time to lift the minimum wage,” he said.
“And if penalty rates are cut, workers will fall even further behind.”
“Malcolm Turnbull says he wants to see an Australia of high wages and high standard of living, but he’s missed the opportunity to put his money where his mouth is by putting in a submission backing a meaningful minimum wage rise.”