Modelling by the Australian Chamber of Commerce and Industry, the largest business group in the country, based on government data showed businesses would have to outlay an extra $4.87 billion annually in wages if the minimum goes up by the amount the Australian Council of Trade Unions wants. The figures were based on pre-COVID workforce data.
The chamber’s chief executive James Pearson said with almost 1 million Australians out of work any wage increase would be counterproductive.
“This is the wrong claim at the wrong time, for jobs, for families, for getting our young people into jobs, and for the recovery Australia needs to make from COVID-19 induced recession,” Mr Pearson said.
He said it was impossible to know how many workers who had lost their jobs were on the minimum wage. “But we do know we need those people back to work as soon as possible, and if you jack up the cost of those jobs that’s going to be harder – it’s completely counterproductive,” Mr Pearson said.
In NSW, where a third of all employees whose wages are affected by the decision work, the cost is $1.5 billion. In Victoria, with 26 per cent, it’s $1.2 billion.
If the independent expert panel that sets the minimum wage opted for a 2 per cent rise, halfway between union and business positions, that would cost $2.43 billion nationally, though it has flagged any rise could be delayed to cushion the impact on businesses.
Australian Bureau of Statistics data shows 824,000 jobs were lost in May, pushing the unemployment rate up to 7.1 per cent, the highest level in almost two decades.
“What we know is that the economy needs stimulus,” ACTU President Michele O’Neill said on Thursday.
“That’s what will create jobs, that’s what will support small business. So I think our case in terms of a lift and reasonable lift in the minimum wage has been increased and supported by today’s [unemployment] figures.”
Council of Small Business Organisations Australia chief executive Peter Strong is expecting the Fair Work Commission pay choose a “really low increase” of about 2 per cent.
“But it should be zero,” Mr Strong said. The minimum wage has not been frozen since the Global Financial Crisis.
Nick Bonyhady is industrial relations reporter for The Sydney Morning Herald and The Age, based between Sydney and Parliament House in Canberra.
Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.