ACOSS submission to Fair Work Australia on minimum wages

Abstract

As the peak national organisation of the community sector and advocate for low income and disadvantaged people, ACOSS has a long standing interest in minimum wages.

We have regularly made submissions on minimum wage fixation to industrial tribunals since the mid 1990s. ACOSS is an interested party with expertise in poverty, employment policy and income support policy, rather than an advocate for union or employer positions. We have not advocated any specific wage increase in the past, and do not do so in this submission. The last minimum wage increase awarded by Fair Work Australia was a rise of $19.40 per week (a 3.4% increase), bringing the federal minimum wage up to $589.30 from 1 July 2011. Comparing this pay increase with inflation and community-wide wage increases over the same period (from July 2010 to June 2011) the Consumer Price Index rose by 3.6% per annum and the Wage Price Index rose by 3.8%. Thus, the minimum wage fell somewhat behind CPI inflation (by 0.2%) and this measure of wages growth (by 0.4%) through 2010-11. The Analytical Cost of Living Index (ALCI) for employees, a more valid measure of changes in their cost of living, rose by 4.5%, significantly more than the CPI. This indicates that last year’s minimum wage increase lagged by 1.1% the increase in the average cost of living for employees generally during that year.