Industrial Relations Minister Tony Burke rejected fears a 5.1 per cent minimum wage rise would lead to a wage-price spiral as something relevant to the 1980s, not the current economy.
“This is to make sure that for the people who are still relying on that, who are still relying on the minimum wage or some of the more modest awards, to make sure that they’re not going backwards,” Mr Burke told reporters.
“An unaffordable wage increase risks inflicting further pain on small businesses, and the millions of jobs they sustain and create,” Australian Chamber of Commerce and Industry chief executive Andrew McKellar said, who has backed a 3 per cent wage rise.“The fact is in nine out of the last 10 years the panel has increased the minimum wage rate above inflation. Wages have not gone backwards over the last decade.
He said small business could afford the wage rise, arguing “if you go up and down the high street, they have factored in amounts above the award because of labour shortages”. UNSW professor of economics Richard Holden said there was a trade-off between increasing the minimum wages and putting upward pressure on unemployment.“That doesn’t mean we shouldn’t do it,” he said. “But it does mean some workers will get a 5.1 per cent pay rise and some won’t be able to get a job.”