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Minimum wage increase to hit retail in February 2021

The Fair Work Commission has said it will raise the minimum wage in Australia from July 1 to $753.80 a week, or $19.84 an hour – a $13 a week increase.

The General Retail Industry Award 2010 will not be affected by the increase until 1 February 2021, due to the inordinate impact the COVID-19 crisis has had on the retail industry. 

FWC president Iain Ross said the panel had noted the polarised proposals from industry groups, and had been given little direction by the Government barring that it be cautious and prioritise keeping Australians in jobs. 

“The Australian economy is going through a significant downturn and is almost certain to enter a recession,” Ross said.

“The shock to the labour market has been unprecedented… and the form and shape of the pathway to recovery is uncertain.”

Ross said the approaching cliff drop of Government wage subsidy JobKeeper, as well as the risk of a second wave of COVID-19 cases as the economy slowly opens up, helped to push the majority of panel members to come to the decision. 

ACTU Secretary Sally McManus said that it was a modest increase, and that the union was disappointed some awards wouldn’t see increases until November or February next year.

“However it is clear in the decision that this panel of experts recognise that cutting wages in the middle of this crisis would be a disaster for working people and the economy and they have rejected the arguments put by some employers to effectively cut wages by freezing the minimum wage,” McManus said. 

“Just about every cent a worker on minimum wages receives, they spend. This is money circulating to local businesses. It is the fastest and most effective form of stimulus we can have.”

According to the ACTU, almost 60 per cent of the economy relies on domestic spending – which is likely to go up as international borders remain closed.

“This is why we must not have wage cuts. Wage cuts are confidence killers which hurts business and job creation,” McManus said. 

National Retail Association chief executive Dominique Lamb said the decision was like Groundhog Day – retailers would wake up in February to find their concerns have once again been ignored, and that they are in a “continuing nightmare”.

“They will wake up to the recurring problem of widespread failure of retail businesses, which will be compounded by wage increases that many simply cannot afford,” Lamb said. 

“The bottom line is that businesses cannot pay money that they do not have and will likely be hit with two wage increases in February and July 2021.

“It is hard to reconcile this verdict with the events of the past six months and the current economic climate,” Lamb said. 

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