The Labor government has officially called on the Fair Work Commission to increase the wages of Australia’s low-paid workers in line with inflation.
In a submission to Fair Work’s annual review of the minimum wage, the government recommended that the commission ensures the real wages of low-paid workers do not go backwards.
The minimum wage currently sits at $20.33 per hour and a decision on any potential changes is expected to be announced later this month.
In a joint statement, Prime Minister Anthony Albanese and Employment Minister Tony Burke said that Labor did not want to see workers go backwards, particularly those on low incomes.
“Economic conditions are highly unusual and challenging given inflation is at a 21‑year high of 5.1 per cent and is expected to increase further in the near‑term due to persistent and compounding supply shocks,” they said.
“High and rising inflation and weak wages growth are reducing real wages across the economy and creating cost‑of‑living pressures for Australia’s low‑paid workers.”
The government noted that many low‑paid workers were young, female and in casual employment, and were more likely to be experiencing financial hardship.
Delivering an increase to wages, said Mr Albanese and Mr Burke, would also contribute to efforts to close the gender pay gap.
“Our submission does not suggest that across‑the‑board, wages should automatically increase in line with inflation, and our broader economic plan has been calibrated to boost productivity, which is the key driver of real wages growth over the longer term,” they noted.
“Ensuring that real wages for low‑paid workers do not go backwards will protect the relative living standards for these workers and give them the best chance possible to earn a decent living, keep up with skyrocketing costs of living, secure more opportunities and actually get ahead.”
Labor distinguished its own submission from that of the former government which included a focus on “the importance of low-paid work”.
“For nearly a decade, low wages were a deliberate design feature of the Liberal National Government. That era is now over,” Mr Albanese and Mr Burke said.
Last month, Fitch Ratings warned that Labor’s plan for higher wages would add to price pressure.
