Australia Announces an Increase in Minimum Wage by 3.75 Percent in 2024

Key Highlights about Increase in Australia Minimum Wage 2024

• The Fair Work Commission has announced a 3.75% increase in minimum wage for Australian workers. 
• According to the new ruling based on a 38-hour workweek, the  minimum wage will be $24.10 per hour or $913.91 per week.
• These changes will be implemented starting July 1, 2024. 

Australia Minimum Wage in 2024

The Fair Work Commission of Australia has declared a 3.75 per cent rise in the minimum wage for Australian workers. Thus, starting July 1, 2024, the minimum wage will be increased to $24.10 per hour and $915.91 per week, based on a 38-hour workweek. A total of 2.6 million people, or 20.7% of the labor force nationwide, will be impacted by this increase ($33 per week) in minimum wage. The decision was made while considering living standards, higher living costs and workforce participation.

While this increase in the minimum wage is welcomed by Australian workers, many small businesses and famous personalities have argued against it. The commission president Adam Hatcher criticized the decision and stated that:

 “It is not appropriate at this time to increase award wages by any amount significantly above the inflation rate, principally because labor productivity is no higher than it was four years ago and productivity growth has only recently returned to positive territory”.

The May federal budget forecasted that consumer price inflation will peak at 3.5% at the end of the current fiscal year and fall to 2.75% by June 2025. According to the Reserve Bank‘s most recent projections, annual inflation will be 3.8% for the current quarter and 3.2% by this time next year. 

Moreover, on Monday, the commission expressed concern that industries that normally employ minimum-wage workers might suffer from a larger boost.

Small Businesses Responded to the Increase in Minimum Wage

While the local workers will welcome and appreciate this announcement of an increase in the minimum wage, the small business owners are not happy with it. Luke Achterstraat, chief executive of the Council of Small Business Organizations Australia (COSBOA), has stated that although small businesses are in favor of increasing the minimum wage of their workers, they are already facing increased expenses in a challenging economic environment. On June 3, 2024, he said on ABC News Channel that:

It’s an extremely tough operating environment; the levy is really breaking for small business, energy, rent, insurance, [and] borrowing costs, and as the [Fair Work] commission said, productivity has been flatlining for a number of years now.

Federal Government Welcomed the Increase in the Minimum Wage

The Federal Government is happy with the decision. The Fair Work Commission (FWC) claimed that the main factor in increasing the minimum wage was the cost-of-living challenges that households had to face. Moreover, the rise in the minimum wage is aligned with projections of inflation hitting the target next year.

Treasurer Jim Chalmers has stated in Question Time that: 

“This is the real wage increase that low-paid workers need and deserve. This is a win for 2.6 million workers and their loved ones.”

The Australian government’s decision to increase the minimum wage represents a major step in addressing the growing cost of living in the country.  This decision will provide the workforce with a more stable economic environment. Employees will appreciate it since they will have more financial security, but small businesses may find it difficult to absorb the increased pay costs. 

However, with inflation expected to reach target levels in the upcoming year, this wage adjustment is expected to eventually lead to a more resilient and fair economy that benefits all Australians.