The Fair Work Commission has decided to increase minimum wages by 3.75%, to $915.90 per week or $24.10 per hour, for the first full pay period after 1st July 2024.
Updated awards will not be published until 1st July – so add an item to your TO DO list for later.
The Fair Work Commission says:
Approximately 20.7 per cent of the Australian workforce, or about 2.6 million employees, are paid in accordance with minimum wage rates in modern awards. They, and their employers, are directly affected by this decision. In addition, there are some categories of employees who are indirectly affected by way of the Review outcomes being ‘flowed on’ by various means. Our estimate is that this decision will therefore operate upon the wages of about a quarter of all Australian employees.
In determining this level of increase, a primary consideration has been the cost-of-living pressures that modern-award-reliant employees, particularly those who are low paid and live in low-income households, continue to experience notwithstanding that inflation is considerably lower than it was at the time of last year’s Review. Modern award minimum wages remain, in real terms, lower than they were five years ago, notwithstanding last year’s increase of 5.75 per cent, and employee households reliant on award wages are undergoing financial stress as a result. This has militated against this Review resulting in any further reduction in real award wage rates. At the same time, we consider that it is not appropriate at this time to increase award wages by any amount significantly above the inflation rate, principally because labour productivity is no higher than it was four years ago and productivity growth has only recently returned to positive territory. We have taken into account that the labour market and business profit growth overall remain strong, but the picture is less positive in some of the industry sectors which contain a large proportion of modern-award-reliant employees. We have also taken into account that modern-award-reliant employees will shortly receive the benefit of the Stage 3 tax cuts and the Budget cost-of-living measures, which are projected to increase real household disposable incomes over the next 12 months. We have treated the forthcoming increase to the Superannuation Guarantee contribution amount as a moderating factor.
The increase of 3.75 per cent which we have determined is broadly in line with forecast wages growth across the economy in 2024 and will make only a modest contribution to the total amount of wages growth in 2024. We consider therefore that this increase is consistent with the forecast return of the inflation rate to below 3 per cent in 2025.
