This week’s decision from the Fair Work Commission (FWC) to hand down an increase to the minimum wage for Australia’s lowest-paid workers is viewed by many as well deserved, but it also adds to the financial pressures being felt by a long-suffering sector.
Prime Minister Anthony Albanese confirmed the decision to increase wages to what equates to a $40 weekly pay rise for millions of workers, as “just the beginning”.
Since 2021, Australia’s minimum wage has been $20.33 an hour or $772.60 a week, with calls for an increase to meet the demands of soaring inflation.
The FWC decision, handed down on Wednesday, will see the minimum wage lift from $20.33 per hour ($772.60 per week) to $21.38 per hour ($812.60 per week).
While the decision will be a relief to those lower-paid workers in the hospitality sector, many businesses in the industry will feel the financial squeeze.
Responding to the FWC decision, Tourism Accommodation Association (TAA) CEO, Michael Johnson said while he thought a wage increase between 3 and 4 percent was very much on the cards, the 4.6 percent was a little higher than anticipated.
However, he said, given the current inflation rates, the increase is understandable.
“But it will put additional financial pressure on our hotels which have been doing it so tough over the past two years,” he said.
“That’s not to say we don’t want to see our hard-working staff well remunerated as we battle through a chronic worker shortage.”
Accor Pacific CEO, Sarah Derry, said people were critical to the group’s business and Accor was supportive of measures which help people with the rising cost of living.
“We are also supportive of measures which help our owners with business running costs,” she said.
FWC President, Ian Ross cited the sharp increase in cost of living, along with rising inflation, as key reasons behind the decision.
“We accept that the approach we have adopted will result, albeit minor, compression in relativities,” he said.
“But that consideration is to be balanced against the need to provide greater relief to low-paid workers in the context of rising cost of living pressures,” adding the strength of the labour market would not have a “significant adverse effect” on the national economy.