What will the 2019 FWC Increase Be?

The Fair Work Commission’s Annual Wage Review is shaping up to deliver another significant increase to minimum award wages. The constant discourse about wages of late has been the almost non-existence of wage rises. With bargaining largely in the doldrums and not delivering any significant increases where it is active, serious economic analysts are calling for more to be done to lift incomes.

As expected, as part of the claims and counter-claims for the annual review, unions want a 6% increase which translates to around $43 per week at the most basic level, the federal minimum wage. Meanwhile employers are either arguing for an increase to match inflation, running at 1.8%, or even less. The federal Opposition, hopeful of being in government by the time the Review takes effect, while not specifying a number, is talking up support for a “living wage”. In plain speak, this is a concept which argues for the minimum wage to be pegged at 60% of average weekly earnings, a level which would see Australia’s minimum wage increase in line with the unions’ demand or more.

Added to these pressures are the comments in recent times of senior Reserve Bank officials, calling for a lift in wages, and making the point that increases in minimum wages had not shown to adversely effect employment, or even hours worked. Further, the Reserve Bank has been unworried about inflationary effects of wage rises, and indicated that a modest lift in inflation would be no bad thing.

Academics and politicians, business analysts and commentators are pretty much all singing off the same sheet on this issue, and that effort is likely to result in another hefty increase in minimum wages this year.

Typically the Commission issues its decisions in these reviews in early June to take effect from 1st July. In the last two years, the increases were 3.3% and 3.5% respectively. It will not surprise workplace relations practitioners if this is equaled or even exceeded this year.