What is a realistic minimum wage?

What is a realistic minimum wage?

3 April 2014

Source: http://retailmedia.com.au

In submissions to the Fair Work Commission’s (FWC) annual wage review, retail bodies have called for increases to the minimum wage to be kept "realistic and reasonable".

The Australian Retailers Association (ARA) recommends that the Fair Work Commission’s (FWC) Minimum Wage Panel increase national minimum and award wages by no more than $8.50 or 1.3 per cent in the 2014 Minimum Wage Review.

ARA Executive Director Russell Zimmerman said the 1.3 per cent increase allows for expected inflation over the year to the September quarter 2014, while clawing back the over-compensation for inflation provided in the past two minimum wage decisions.

“It is no secret that the retail sector is on a low to negative growth period during this time of low consumer confidence and low business confidence in the services sector,” he said.

“The ARA strongly recommends the FWC hand down a minimum wage increase that is realistic and reasonable and one that considers weak economic trading conditions, current and imminent wage bill increases for industries undergoing structural adjustment and underemployment levels.

“What also must be taken into account is that the retail sector could hold potential wages growth if costs through wages are kept under control,” Mr Zimmerman said.

The Australian National Retailers Association is recommending a 1.4 per cent rise in the minimum award wage, which would result in the minimum wage within the retail sector’s modern award increasing to $691.90 from the current $683.40.

The National Retail Association recommends an increase in the minimum wage of no more than $9.30 per week, based on a 38-hour working week. This figure represents a total increase in the minimum wage of 1.75 per cent, then offset by the 0.25 per cent increase in mandatory superannuation contributions paid by employers.

Master Grocers Australia (MGA) recommends that the panel impose an increase of no more than 1.25 per cent to minimum wage rates for award-reliant employees. MGA claims that it is not economically feasible for the independent supermarkets and liquor stores across Australia, which form the membership of MGA, to sustain an increase to award rates in excess of 1.25 per cent, following the 2.6 per cent increase in July 2013.