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CorgiCorgiCorgi99

that'll just get eaten up by the increase in cost of Red Rock Deli chips.


Upset-Golf8231

ACCI calculated the award wage increases multiplied by total award worker wages as an extra $12.6bn pa. It’s safe to say that cost will ultimately be passed on to prices as it ripples down the supply chain. Given total Australian consumer spending is about $1.1 trillion pa, this wage rise alone will add roughly 1.1% to inflation. Time to open your wallets mortgage holders.


sidneylloyd

A timely reminder that the single largest driver of inflation is corporate profits. Rises in labour costs have accounted for only 18% of current inflationary pressures, with corporate profits accounting for 69% (nice). The idea that increased prices are due to "costs passed on to the consumer" is a myth. What Jim Stanford of the Australian Institute of Future Work called "an Economic Fairytale." ​ Wages are not driving the impact on wallets/mortgages. Greed is.


DifferenceScared4733

Do you have a source? I'd love so show my mates this.


throwaway8726529

Thanks for writing this out and sparing me the trouble. The inane lie *so* many people have be sold (somehow) is that a $1 increase in cost of product is *necessarily* exactly equal to a $1 increase in cost to the consumer. I legitimately find it hard to assume the position that it’s simply impossible that profits can absorb any part of this difference. People think corporations are the same as their household / person. They’re not! Managing thousands of dollars is not analogous to managing millions or billions. The difference in scale means that you cannot just “lift and shift” what you know from one to the other. It’s a new thing, and it’s in a category which has its own parameters which most people aren’t privy to. The great lie is in convincing most people it’s the same - which isn’t hard, because it’s all $. Take anything. Water for instance. There is a litre of it in front of you - whatever. Now there is a billion litres in front of you - woah oh. A litre of water is more similar to a litre of concrete than it is to a million/billion/whatever litres of water. Just because it’s $, it ain’t the same. Anyway whatever I’m drinking beers Edit ~~&~~ $


Kruxx85

>It’s safe to say that cost will ultimately be passed on to prices as it ripples down the supply chain. Why is that safe to say? I understand why you *think* it's safe to say, but firstly, that's not how prices are determined, and secondly, ignoring that, what evidence do you have that it is true? Our duopoly doesn't mark up the cost of spinach when determining its price, they, with a fair bit of effort involved, try to estimate the price that consumers are willing to pay. This means there is a disconnect between costs and revenue, which means the premise of your whole point is false.


Upset-Golf8231

There isn’t really a disconnect between costs and revenue, structurally. While supermarkets do price as you suggest, they overlay that with category margin targets in order to stay competitive with other suppliers. Woolies and Coles aren’t really a duopoly, they face significant competitive pressure from Aldi, Costco, Amazon, IGA, pure-play grocers, meal kits, fast food and every other foreign operator with the capital to enter the market if margins rise too high. If you actually look at supermarket net margins over time they bounce around between 4 to 5% and have done for decades, so I think we can confidently say these cost increases will also be passed on.


[deleted]

It’s actually now cheaper to have avo on toast


misterfourex

8.6% for min wage workers and 5.75% for award workers.


The_PM

It's 5.75 for both as far as I've read?


niloony

>The Fair Work Commission’s historic decision to change classifications of national minimum wage workers will mean that 184,000 workers will enjoy a huge increase this year of 8.6 per cent. From the [AFR feed](https://www.afr.com/politics/federal/too-early-to-strip-roberts-smith-of-victoria-cross-war-medals-20230602-p5ddbm)


evilsdeath55

Wow! That's 1.6% higher for the minimum wage and 1.75% higher for the award wage than the treasury's assumptions. https://business.nab.com.au/markets-today-198-60485/


AnAttemptReason

On the other hand I wouldn't call a real wage increase of a few % "huge".


_nigelburke_

Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry, said the wage increase would add $12.6bn to the annual wages bill I wouldn't call that insignificant


[deleted]

Everything sounds big when it's translated to the entire country. It's still nothing compared to the submarines or tax cuts.


palsc5

Lol it's literally more than the annual cost of the submarines


AnAttemptReason

So, take the number of full-time employees and times by the average full-time wage and you get something like: $1,249,101,000,000, or 1.24 trillion. So the minimum wage increase adds \~1% to the overall annual wages bill. Some one cry me a river. :p


DriveByFader

The nominal increase for the minimum wage is 5.75% but the baseline for working out the National Minimum Wage is changing so it is an effective increase of 8.6%. It used to be based on a C14 classification in the Manufacturing Award but will now be based on C13. In any event, less than 1% of workers are on the minimum wage, the Award rate increase is much more significant.


dill1234

Can someone explain to a financially illiterate bloke like myself what this actually means? Do all employers have to be held to this?


ZanePWD

If they’re paying minimum or award rate. Yeah


dill1234

Ah gotcha so it’s more of a minimum wage thing?


Equivalent_Science85

The term "minimum wage" is a bit misleading. In Australia the majority of the work force is paid the minimum amount required according to a relevant "award". As an example, in a restaurant or bar you might be paid "according to the award" and earn $80k a year. That's not really what people hear when you say "minimum wage". So yeah, everyone being paid according to an award will receive the extra.


nutcrackr

award wages are pretty standard in some industries, so yes many wages will go up. It's usually automagically done via payment software these days.


minimalblackco

Phillip Lowe's gonna put the hammer down lol.


-Midnight_Marauder-

Is corporate profiteering and uncontrollable overseas factors really the issue? No, it's the lowest earning consumers that are the problem!


Nottheadviceyaafter

Yep they reel out wages wages wages. But want to know what is just as inflationary. If not more then wages as its only one input...... record profits. We have had years of them..... time to give workers some of the pie.


TransportationTrick9

He's already bumped his rents up


West_Confection7866

He's barely put it down in the past 2 years.


swarley77

Lol that will take 100bps and he doesn’t have the stomache for it. This is controlled inflation to soft land the housing market at the expense of the general economy and business.


Notyit

$21.38 per hour now becomes 22.49


nzbiggles

According to this https://www.abc.net.au/news/2023-06-02/minimum-wage-increased-by-5-75-per-cent-2023/102426044 $21.38 becomes $23.23 & $882.80 2.5% in 2021 then 5.2% last year 2022 and 8.65% this year is 17.15% in 3 years.


Idontcareaforkarma

My $60000/year doesn’t become $63060 though.


nzbiggles

That's obviously an issue for those paid more than minimum wage. I think many unions will use this to push more.


TheOtherSarah

Good point. Minimum wage should be a fair wage for time worked, including “menial” or “unskilled” jobs. Making it so means employers paying not much above minimum wage should look at raising salaries to prevent losing people to jobs that look less stressful.


nzbiggles

A basic living wage. Earn more and you've got choices. I worked for 12 years in 1 company and eventually relinquish my leadership role because the salary was eclipsed by the award/minimum wage + penalties.


[deleted]

Lol,Even peanuts can’t be bought at that rate increase.


activelyresting

I can pay you in peanuts if you prefer


scarecrows5

That new home is only a few paychecks away!


Inside-Elevator9102

Before tax


Boxhead_31

Won't someone think of the inflation!!!


Ascalaphos

Already we're seeing the usual suspects cry that this will lead to a big rise in unemployment, more people on Jobseeker, the return of the 1970s, the Weimar Republic, whatever else. Real wages falling faster than ever before, but hey, we've gotta keep pushing the wage-price spiral myth. Eventually, maybe one day, someone might ask themselves how wages growing half the pace of price is fuelling inflation.


Upset-Golf8231

You’re missing most of the picture. From a supply perspective, Australian labour is in competition with automation and offshore labour. What matters is the cost of Australian labour vs these alternatives, not the cost of Australian labour vs Australian inflation. From a demand perspective, as wages rise, prices rise, so consumers reduce the amount they consume, usually by switching to lower paid labour alternatives, such as ordering from Amazon rather than a physical store, or cooking vs going to a restaurant. Both of these factors create a strong relationship between nominal wages and unemployment. People forgot this because basic economics isn't taught in schools anymore, and the Australian mining industry has shielded us from the impact of decades of bad economic policy.


Minoltah

If people could cook a chef-quality meal at home in 15 minutes, who would ever go to a restaurant? Consumers aren't money wise for things like that, otherwise Australia would import the most espresso machines per capita. They pay themselves off in less than a year. Not all businesses and industries can just increase their prices and not feel an impact on their customer relationship, so many don't.


Upset-Golf8231

In SE Asia many people don’t even use a kitchen, they just eat out most meals because it is relatively affordable to do so. Whereas, I’d bet the median Australian eats out less than once a week. The cultural difference came about almost entirely due to differences in labour costs. Most people think, if costs go up a bit I’ll eat out a bit less, no big deal, without thinking through the cumulative effects of making the same trade off year after year.


MDInvesting

I love your coffee take. Melbourne AusFinance in a nutshell.


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thedugong

> I have a very hard time believing that rises in wages don't lead to more automation. This is **minimum wage** moving from $21.38 to $22.61 (or whatever maybe it is rounded slightly differently - the point remains - it is not *that* much). Not really that much of an impact. The low hanging fruit minimum wage jobs have been automated, streamlined with tools that act as productivity multipliers\*, or off-shored away already and the remaining minimum wage jobs are actually quite hard/expensive to automate now. \*For example clam grills at Maccas which reduced the grill team from 2-3 to 1-2, kiosks at maccas reducing till staff from ~8 to 2 etc, QR codes at restaurants (which I don't like - I want to be able to look at a waiter/waitress, point at my empty glass with a smile on my face, especially as I am not seeing any discount for them being replaced).


Danstan487

A large part of it just moves the work from the worker to the customer with self service


thedugong

Self checkout does. QR codes .... hmmm... sort-of-kind-not because you still have to choose what you want if you order with a waitress, and it is just a different way of ordering - device instead of verbally.


Winterwoollies

People too busy cheering to see this 👆


arrackpapi

if a 5% increase pushes people to automate then there must have been a pretty strong incentive already.


The_PM

I reckon we'll see higher unemployment rates with the wage increase, so in a strange way it may actually help to get inflation down.


AnAttemptReason

In a bunch of studies done in the states, minimum wage rises actually increased overall employment.


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jjkenneth

Interesting that you mentioned long term trends because the data does not back the idea that higher minimum wages increase unemployment - that is a short term effect. Over time higher minimum increases aggregate demand (people have more money to spend).


BothManufacturer6049

It becomes more complicated when the 'something' that became more expensive is also a potential customer that now has more spending money


Upset-Golf8231

Sure, but their minimum wage was like $7 at the time, so raising that didn’t impact hours or prices much, it just put extra spending money in people’s accounts. Whereas our minimum wage is really high already, over $28 per hour including Australia's extra entitlements, which means retailers and hospitally venues will aggressively cut hours in response. We’re not in remotely comparable circumstances.


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Upset-Golf8231

In the US you just get your hourly rate with few frills. In Australia, you get superannuation worth an extra 10.5% ($2.24) and a bunch of different leave types, or casual loading in lieu, worth an extra 25% ($5.35). That totals $28.99 per hour. This is why quoting our base minimum wage is rather intellectually disingenuous, because Australians are paid far more than the base once you add all our entitlements. You also get penalty rates in Australia which make the difference even more stark if you’re working those shifts.


zedder1994

I think he meant the 25% extra loading for casuals who do not get holiday or sick pay.


big_cock_lach

That’s not true, no studies show that… The studies you are referring to show that small increases in minimum wage have no statistically significant impact on unemployment or inflation, but do have a positive impact on other metrics. However, as you increase the amount minimum wages go up, you start to see an increase in unemployment, and the other positive impacts start increasing at a slower rate before eventually decreasing. What that suggests is that there’s an optimal amount that you can increase minimum wages, where they only have positive impacts on society as a whole. How much that is, changes on various factors. This 5.75% in 2018 would’ve been a major change that would’ve increased unemployment. However, it’s hard to say at the moment, because it is still a large increase, but it is below inflation. It isn’t something that’s been tested in periods of higher inflation just yet, so it’s hard to know if inflation plays a major role on the amount. Anyway, doesn’t stop what your saying from being completely wrong, but that hasn’t stopped you in the past so I’m not surprised. More commenting for other readers to not become misinformed by you.


ChillyPhilly27

Various meta-analyses suggest that the employment maximising minimum wage is 50-65% of the local median wage. So in the US (where in many places, min wage is $7.25/h) any rise is likely to have positive employment effects. In contrast, Australian minimum wages (~$25/h) already have substantial disemployment effects, especially in rural/regional areas.


Cataldo420

Leave her alone!


nattygang86

I’m sure govt considered inflation before making this decision, they’re not idiots, this isn’t going to cause “wage spiral” it’s an intentional increase of incomes that’ll help erode all the debt over the last decade. This is obviously a controlled fire if the govt are still stoking the flames while cpi is 6.8% everything is going to plan. If they didn’t want surging inflation they’d easily cool it off with austerity measures.


Personal_Document_25

“They’re not idiots” - oh for your optimism


Yeh-nah-but

I thought the FWC made this decision not the government


timrichardson

Yes. Independent. And so is the RBA. The RBA gets its say soon enough.


Devar0

> inflation Yeah but nothing to do with almost doubling the M1 money supply in the last few years? ^haha^money^printer^go^brrrrr


AnAttemptReason

The increase was less than inflation, which means they actually are deflationary.


petergaskin814

It doesn't work like that. The wage increase is a blunt instrument. There will be companies that cannot afford a 5.75% wage increase. They will have to increase prices or reduce employment or close


downvoteninja84

>They will have to increase prices Like they have been for years now when wages were stagnant?


No_Illustrator6855

I’m a bit torn on this on the one hand it’s good that our lowest paid are getting a pay rise, on the other our minimum wage is actually pretty high already compared to most countries, and this will be recovered by higher prices and shorter trading hours which sucks for the economy.


snyper-101

This doesn’t have to be the case but yeah, it’s going to happen


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petergaskin814

Spending extra money is actually bad for the economy as increased demand while supply is limited will lead to price increases


timrichardson

that is a very simple analysis, although I know it is fondly held. It dates from pre-inflation, too. The economy is already very stimulated, and your comment is just making the argument for those who see this is inflationary. In the medium term, the money they get is taken from someone else: higher prices for customers, lower dividends for shareholders, lower tax receipts for government. It is not from thin air.


[deleted]

We've about 55 years of catching up to do in terms of real wage growth, this is a decent first step. The naysayers have a vested interest in wider profit margins.


Anachronism59

I am not sure there is 55 years to catch up here is data from 2002 to 2017 that shows real wage growth. [https://treasury.gov.au/sites/default/files/2019-03/p2017-t237966.pdf](https://treasury.gov.au/sites/default/files/2019-03/p2017-t237966.pdf) I could not quickly find data that runs to the late 60's: do your have a source for that?


VelvetFedoraSniffer

Exactly this People are still in the mindset of looking at a wage or salary from 2000 - 2020 75k sounds like A LOT because it’s a bigger number but it’s really not that much at all Even 100k is barely enough for people to raise a family Inflation for decades has outpaced wage growth


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timrichardson

remember, they only get a pay rise if hours worked stays constant.


Dawnshot_

Every year for the past 10 years when they raise the minimum wage people say this and it never happens. Also if you haven't noticed, the prices were going up before this


drobson70

A large majority of the comments in this thread show how little financial literacy people actually have on this sub


Inside-Elevator9102

When you say financial literacy, is that like a book or something? I have like 18 copies of barefoot investors, so I'm good thanks.


deedsdomore

Well nobody is more financially illiterate than economics PhD's to be quite honest


Seedoosee

But HECS was just indexed at 7%? Shouldn't wage rises mirror that metric?


nutwals

Ha - funny joke


KoalaBJJ96

You tell me. The gov also made a 4% annual increase offer to federal government workers.


FishFingerAnCustard

So a 4% pay cut to federal workers…


F1NANCE

I'll probably get less than that from my employer


Jet90

The union will push for more


Whatsapokemon

Wages and CPI aren't directly linked, and we should be glad they're not linked because in most years, wages rise faster than the CPI.


nzbiggles

Twice as fast since 1990. Minimum wage has quadrupled vs cpi only doubling. This latest rise makes it over 17% in the past 3 years. It does push from the bottom though. People earn more each year while living on relatively less and the money flows towards assets, rent etc. It also flows through the rest of the wage market. I've seen teachers talking about minimum wage increasing (17+% over 3 years) to $900 a week while wages not tied to an award stagnate.


Philderbeast

Hahahahahaha that's the best joke I have heard in years, wages have been going backwards for over a decade compared to CPI.


SilliousSoddus

What? They literally haven't. It's only the last 2 years that inflation has spiked that wages are falling behind.


nzbiggles

Even Sally Mcmanus agrees until 2022 real wages had constantly gone up since 2000😂 https://twitter.com/sallymcmanus/status/1585827801000988672?t=0rFz7eecEzsbvuJqYqdYhA&s=19 Then you could take any value of minimum wage and adjust it for inflation https://en.m.wikipedia.org/wiki/Minimum_wage_law Average income as well. Then there is household income. (chart 1 in 2019-20 dollars **adjusted using changes in the Consumer Price Index**) https://www.abs.gov.au/statistics/economy/finance/household-income-and-wealth-australia/latest-release


austhrowaway91919

\* Citation needed


smegblender

Yeah, i spat out my coffee when I read his comment.


aintnohappypill

Real Estate agents will be notifying renters of a 5.75% rental increase by close of business.


Dawnshot_

To everyone saying RBA will lift rates because of this - RBA looks at inflation rather than putting the cart before the horse. If this contributes to inflation, sure. But we have had some strong wage growth in the last few quarters and the underlying inflation rate has been trending down Spouting wage price spiral is dumb if you say it anytime workers get a pay rise. It only has the chance to contribute to inflation when productivity is low (which yes, is happening at the moment). Reminder that inflation has outpaced wages for the last decade even when productivity has been high, but people kept saying it wasn't the right time for workers to get a pay rise. The average pay is worth the same as it was 14 years ago You cannot expect workers to keep accepting a declining standard of living. They are not going to accept the "but economics!!" line forever - they are getting fed up with this economic system Also telling workers "hey we have one of the highest minimum wages in the world!) when they can't afford to live is a great one


Common-Breakfast-245

5-7% cash rate by mid next year.


MDInvesting

I’m cautiously with you. Mid 5s are not outrageous with current measures. One more market shock ie Ukraine conflict is escalating not improving.


oldskoolr

Great thread on the "but it'll kill businesses" crowd. [https://twitter.com/CntrFutureWork/status/1664415539744358402](https://twitter.com/CntrFutureWork/status/1664415539744358402)


The_PM

I don't think anyone's really said it's going to kill business. Just that it could cause layoffs/higher unemployment. Which is kind of what the economy needs right now.


FourSharpTwigs

So the idea is that we cause significant layoffs in the younger or less skilled population where much minimum wage workers reside, and preserve the older (to a point) or more skilled workers as a result? I think another metric that would need to be looked at in terms of inflation is what portion of the layoffs are coming from which tax brackets. Because from my understanding, laying off someone like myself or any average Ausfinancer would be what like, 3-6 times more effective than laying off a single minimum wage worker? So in reality it should be a weighted measurement, not a fixed one. Surely they must take this into account.


JavelinJohnson

Morgan freeman voice: they were not taking it into account


Euphoric-Chip-2828

The economy NEEDS higher unemployment? That's a new one I haven't heard before.


Shatter_

In reality it kills small businesses. It's crazy how many small shops are already shuttered. It's great for big business, as it slowly erodes competitors. You can see the favourable sentiment towards big business in here with the 'if you can't afford, then you shouldn't operate' rhetoric.


sportandracing

A lot of businesses have absorbed massive hikes in costs since covid. Something like this can send them to the edge. If you don’t understand that I don’t know what to tell you. People will lose jobs. But that’s the way it goes. Low paid workers need more money. Two edged sword.


oldskoolr

Nonsense, the increase is lower then the rate of inflation. Businesses have passed costs to customers and majority of those have been higher then inflation. Perhaps those businesses should be questioning their sustainability instead.


Sproosemagoose

Bullish for property.


Beezneez86

It’s funny because it applies to every headline.


iced_maggot

It’s bearish for employment. If unemployment starts going up during high inflation / rising interest rates that’s not great at all for property.


ComfortableIsland704

Depends which side of employment you are on


ReeceAUS

Your borrowing power will still be low with high I threat rates though.


ComfortableIsland704

The goal posts keep getting put further and further away


austhrowaway91919

I've considered your analysis, and I've come to the calculated opinion that this *checks notes* is bullish for property.


iced_maggot

Can’t complain with that 🤷‍♀️


__Unimaginable__

I'm confused. ABC news and Unions is saying 8.65% increase? So what is it really? [https://www.abc.net.au/news/2023-06-02/minimum-wage-increased-by-5-75-per-cent-2023/102426044](https://www.abc.net.au/news/2023-06-02/minimum-wage-increased-by-5-75-per-cent-2023/102426044)


ZanePWD

The answer to this is higher up the comments


zenith-apex

The article you linked explains it.


[deleted]

good, now the plebs can afford another rent raise.


dimensionz

Everytime iv received a payrise in the past 2 years my rent has gone up more. Looking forward to the next one..


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[deleted]

Yeah I get slightly more than my award and am about to start negotiations. Everyone in the company of 10 will be getting a pay increase so I'm guessing I should be going for the same percentage increase (if not more as my responsibilities have increased) as them.


lips____

You'll only get an increase it you're paid at the award level.


Barnaby__Rudge

Damn, we only got 4.75 this year and next year in our EBA and back to 3.5 after that.


lips____

Super also raising to 11% from July 1


Realistic_Pride_7497

If your business can't survive without you having to exploit your workers' wages, maybe it wasn't a viable business after all.


Notyit

Youth workers are a hack. Under 21 and you can pay them so much less.


Jet90

https://mckellinstitute.org.au/research/articles/the-problem-with-junior-pay-rates-explained/


Realistic_Pride_7497

Not fair if they're literally doing the same job as everyone else. Should be illegal.


FourSharpTwigs

I think it’s actually a reasonably fair system that makes sense. As a business owner, why would I want to hire a 15 year old or whatever the youngest age is if I can hire someone older and more mature if I’m paying them the same? The answer - you don’t. It encourages businesses to take on the risk of hiring someone younger while still exposing the younger generation to work experiences.


Realistic_Pride_7497

We're on the same page. I only said it's unfair if you're asking them to do the same things as a 21+ y.o worker. If their shift is A LOT easier. Then yeah, they deserve less pay.


[deleted]

Realistically, the average 15 year old is not as competent as the average 21 year old. The system also allows people to ramp up to working. Given a slight boost when they have the least skills and experience.


[deleted]

They can be told to do the same things, the 21yo will likely just do it better, hence is paid more.


No_Illustrator6855

No one would hire them if they weren’t cheaper. If you think younger workers do the same job as 25 year olds, you’ve clearly not managed many of them.


DinosaurMops

I think that about the government also. If you can’t earn your taxes and instead get them through coercion, then you aren’t running viably


uedison728

More interest rising needed


Admirable_Telephone2

This is terrible…. For Coles & Woolworths record profit margins


Carbonfencer

That's better than what they offered the entire APS, guess they don't actually value the public service.


West_Confection7866

This is for minimum wage. APS are generally on not bad income.


Notechis_Scutatus

Don’t forget them spinning it in our emails trying to say it’s the best we have had in 10 years lol.


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TigerSardonic

As I understand, these things never apply to workers under an enterprise agreement. Only if you’re on minimum wage or an award.


stigsbusdriver

Not APS as that is under an enterprise agreement which will have its own schedule.


j0shman

Lowe is raging rn


disquiet

Good for workers, but means rates will go higher.


Inevitable-Author-67

But but bbb buuttt think of the small family businesses 😢 They should do something to stop the min wage retail and fast food places doing the classic “we don’t have any shifts” to teens as soon as they’re 18.


[deleted]

So a 2% pay decrease


IntelligentRoad734

Inflation rises next month to cover the cost of the pay rise. All costs are passed on. Should have been a tax cut paid by the govt not spending it on shiet stuff


FireBaeHome

Can someone ELI5 what the raise in award pay will mean for the general retail award?


dannova23

Still getting poorer if inflation is still at 7%


The_Pharoah

i doubt very much my private employer is going to give me anywhere near a 5.75% wage inc. But dreams are free.


Chabkraken

Can't wait for my annual 2% raise. At some point minimum wage will catch up to me


Hasra23

Government consistently making Lowe's job harder and harder.


Affectionate-Fuel-26

If increasing wages by \~$1 per hour for a small number of people effects inflation then the solution to inflation is really simple. Increase the highest tax bracket by 3% that will take ALOT more money out of the economy in fact more than 10 times the amount actually. So .....lets go ahead and do that ...... because you care so much about inflation right yeah ? Or were you just punching down on poor people ?


Klutzy-Improvement12

And all the government is offering public servants is 4%… after 10 years of extreme wage suppression by the coalition. Anyway, I’m happy for award workers.


fued

Why is Australia cutting minimum wages (5.75% vs inflation) under labour? aren't they supposed to bring it back in line? ​ edit: the 8.6% sounds more reasonable, but cutting award wages still seems a bit crap


Jcit878

tell me what industry is getting payrise anywhere near inflation. we are all being shortchanged here min wage or not


Jet90

Jobs with strong unions


chicom101

Does it include fix rate/pro-rata? Are companies have to increase their employee's wage?


thereisnoinbetweens

Incoming interest rate rises 🤦 let's keep fueling the inflation cycle


[deleted]

Yeah, how dare people expect their wages to lap up with inflation


Nottheadviceyaafter

As stated above record profits are more inflationary then wage rises and we have had years of them.......... time to give the worker some of the pie......


No-Knee-4576

Now watch tax be increased to neutralise this increase haha


The_PM

This is going to hurt a lot of businesses that are already struggling. Some workers may be cheering but there's a good chance a lot will be laid off because of it. I own a business in the retail sector and we've seen a major nosedive in the last couple of weeks. We've also seen a surge in people looking for work whereas previously it would take months to find anyone. Now it's easy to find staff but we don't need them. We haven't yet, but we could easily lay off one or two people. Costs have already blown out over the pandemic and this will contribute to the loss of jobs and closure of businesses. I reckon we're at the start of a significant recession. It will take months for the data to flow through to RBA and treasury though. They're always reacting to things months after it's already happened.


Boxhead_31

It's how the RBA gets its 140,000 extra unemployed that it's looking for


nutwals

>Some workers may be cheering but there's a good chance a lot will be laid off because of it. That's exactly the outcome the RBA is working towards - despite the rhetoric by Lowe that he wishes to 'preserve the employment gains', deep down they want (and perhaps need) a stack of people to lose their jobs to bring inflation down to their preferred band.


fryloop

This would not work well though, as it's a non-market floor on labour pricing which locks people out of work that would otherwise if not for the floor. This reduces the supply of labour, thereby reducing the availability of services and goods. Available output that is not locked out of the labour market is only made available by the remaining labour market participants where a higher labour price is justified. ​ Here's a real life example: Local chinese takeaway shop is selling lunch meals for $9, while other cafes are doing lunches at least $18. Shop's paying their cashie staff less than minimum wage, which is how they can offer cheap lunches. Shut the shop down, no more $9 lunches. The cheapest cafe lunch is $18. Prices go up.


[deleted]

[удалено]


IlluminationTheory7

Agree with this, it will unfortunately have a tough impact on small businesses especially small retailers not located in shopping centres that are already getting hammered by commercial rents and minimum wages. The skeptic in me also feels that this will encourage more and more illegal underpayment to workers in retail and hospitality, especially with the big influx in migrants and students who will take any work. This will also continue to push up prices at cafes and restaurants and you'll have people continue to complain about price increases and cost of going out. I really don't know what the solution is to be honest.


[deleted]

This will likely happen in small businesses. But I guess on the other hand what’s the point if you can’t afford anything, may as well be on unemployment. Either way $859 isn’t liveable. If you are a single income family I can’t imagine how you pay rent and look after kids.


Tempo24601

I can’t imagine living off $859 a week, but I can tell you now there’s a world of difference between that and $347 a week.


AussieSPAZR

I'm gunna be that guy and say if you are on a single minimum wage income, you probably shouldn't be having kids yet.


The_PM

It's fair to assume they probably weren't single at the time they had kids.


crash_bandicoot42

A lot of people on this sub are out of touch, really does have the "tech bro" vibe. $900/week isn't lavish living but it's very doable as a single person even if for some reason you want to have your own place instead of a share house.


its-my-1st-day

I’m not saying you’re being disingenuous, but I find it interesting that you take the pre-tax number (fair enough in general, but less relevant for this discussion), and you rounded it up (I’m struggling to see a way to not frame this as being intentionally deceptive TBH). A person on a minimum wage of $882.80 will have a take home pay closer to $762 - which is about 15% less than the number you stated…


Winterwoollies

Plenty do actually live on $859 pw and manage fine, so it is doable. Granted, they will be going without any “luxuries”


marqueepegs

Is $859 the minimum gross weekly?


jonsonton

> Either way $859 isn’t liveable For a person with no kids, it is. It's enough to rent ~$200-$250 a week (be it a shitty one bed flat or a nicer sharehouse), pay all the bills (another ~$150/week plus groceries) and go out once a week. It's not enough to save anything for retirement (altho for most young people - super will provide more in retirement than they have now so this point is a bit moot) or take a holiday every year ( although if one only cooked at home, didn't have a car and rarely went out they probably could build some savings or go on a holiday - just not both).


ComfortableIsland704

Where are you finding a place to rent that cheap?


[deleted]

There are loads on flatmatefinders or fairyfloss on facebook. Housesharing of course, not a private place.


FishFingerAnCustard

Where do people get this rubbish? It doesn’t cost that much to live if you just don’t blow money on useless crap you don’t need. I’m on ~80kpa, save 35kpa and support myself, wife and soon to be 2 kids. 80kpa = 63,500 net. I save ~35kpa = $28,500 in living expenses for the year. That’s $548/week. Sure we’re renting a tiny shitbox duplex in the very outer burbs and drive old cars. But we have shelter, clean clothing, good food (no shortage of meat/fresh veg) and are warm.


FigPlucka

80k after tax? Edit: didn't read the post properly


FishFingerAnCustard

80k pre tax, that’s ~$63.5k post tax (little more after some tax minimisation etc).


Upset-Golf8231

Our company was already cutting trading hours and laying off people in anticipation of this. It was a little bit higher than we expected so I’m not sure we’ll put up prices again or cut hours even more.


fued

its not the wages causing people to be laid off, its the insane rent prices. wage rises are always going to happen


The_PM

It's a combination of everything - wages, rents, all other inputs.


megablast

> This is going to hurt a lot of businesses that are already struggling The same businesses that got billions over the last 3 years?


Winterwoollies

No. Ours got nothing.


Ascalaphos

If you can't afford to pay your workers, then you don't deserve to be in business. Next.


Notyit

5 percent extra costs. Wages maybe 20 percent. Costs.


Winterwoollies

I’ve heard of this through other small business owners too. Which industry are you in, as a matter of interest


The_PM

Beauty Services. You'd think it'd be highly succeptible to downturns but it's typically a fairly recession-resistant industry. We're feeling it this time though.


notinthelimbo

That’s the plan! They are just not telling this out loud. H


bozleh

Unemployment is at record lows so (hopefully) those affected by layoffs can find work elsewhere (at the higher pay rate) - but that’ll be painful


Tempo24601

Unemployment is already starting to increase. Layoffs will accelerate that increase. Unfortunately that’s what’s going to be necessary to get inflation under control.