SYDNEY (Reuters) -Australia’s independent wage-setting body on Tuesday raised the national minimum wage by 3.5% effective July 1, a real wage increase for about 2.6 million workers on the minimum wage as inflationary pressures ease in the economy.
The minimum rate will rise to A$24.94 ($16.19) per hour for about a fifth of the Australian workforce, the Fair Work Commission (FWC) said in its annual review.
Headline consumer price inflation held at 2.4% in the first quarter, comfortably within the Reserve Bank of Australia’s target band of 2% to 3% and having come down from the 7.8% peak in late 2022.
“The Reserve Bank’s assessment that inflation has sustainably returned to its target range … indicates that this inflationary episode is now over,” FWC President Adam Hatcher said.
“This provides us with an opportunity to go at least some of the way towards correcting what has happened over the last four years by awarding a real increase to … the national minimum wage.”
The Reserve Bank of Australia cut interest rates to a two-year low last month as cooling inflation at home offered scope to counter rising global trade risks, and left the door open to further easing in the months ahead.
At the same time, the labour market has remained surprisingly resilient, with the jobless rate hovering at 4.1% for over a year now. Employment gains have been driven by a surge in public sector jobs, with still tepid wage growth suggesting few risks of a damaging wage-price spiral.
($1 = 1.5401 Australian dollars)
(Reporting by Stella Qiu and Renju Jose in Sydney; Editing by Jacqueline Wong)
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