Above-Inflation Increase Set for July
The Fair Work Commission (FWC) confirmed a 3.5 per cent rise in the minimum and award wages. This increase will take effect from 1 July 2025. More than 2.6 million Australians will benefit from the rise, including workers on both the national minimum wage and modern award minimum wages.
New Wage Figures Revealed
From July, the minimum hourly wage will increase from $24.10 to $24.94. Weekly wages will rise from $915.90 to $947.96. A full-time worker’s annual wage will increase from $49,770 to $51,511.95. The rise will deliver about $32 extra each week. The increase sits above the inflation rate of 2.4 per cent.
Australia’s Fair Work Commision
Commission Delivers Review Outcome
The decision followed the Annual Wage Review in Sydney at 10am on Tuesday. FWC president Justice Adam Hatcher said the Commission focused on reversing real wage losses. He said, “The principal consideration which has guided our decision is the fact that, since July 2021, employees who are reliant on modern award minimum wages or the national minimum wage have suffered a reduction in the real value of their wage rates.”
Real Wages Declined Since 2021
Justice Hatcher confirmed the C10 award rate fell by 4.5 percentage points compared to the Consumer Price Index. “The result has been that living standards for employees dependent on Modern Award wages have been squeezed, and the low paid have experienced greater difficulty in meeting their everyday needs,” he said.
Average monthly income in different regions of Australia
Inflation Pressures Eased
The Commission had previously avoided CPI-matching wage rises to avoid stoking inflation. “The Fair Work Commission has repeatedly deferred taking any action to reverse this decline in real wages out of a concern that this might result in the persistence of higher inflation,” Hatcher said. “The inflationary episode is now over,” he added.
Low-Paid Workers in Key Sectors
Justice Hatcher said award wage workers mainly worked in accommodation, food services, retail, healthcare, and social assistance. He said many were part-time or casual and most were women. “Workers were also disproportionately female,” he said. Two-thirds worked part-time, while more than half were on casual contracts.
Productivity Performance Affected Decision
Labour productivity trends influenced the FWC’s final figure. Hatcher said, “A continuing poor performance in labour productivity was a restraining factor.” The increase was also moderated by the upcoming rise in the Superannuation Guarantee and global economic uncertainty. “We have determined this problem is primarily located in the non market sector,” he said. He noted strong employment growth in healthcare and social services.
Capacity Exists in Market Sector
Hatcher said market sector businesses could handle a modest real wage increase. “There has been modest growth in labour productivity over the current multi year cycle, which indicates some capacity for business to pay a modest increase in real minimum wages,” he said.
ACTU Welcomes Outcome
Australian Council of Trade Unions national secretary Sally McManus welcomed the decision. “The Fair Work Commission accepted the arguments made by unions that it was time for low-wage workers, award workers, to start catching up for what was lost during the inflation spike,” she said. “So, 3.5 per cent means they’re starting to catch up again, and that makes an enormous amount of difference in terms of people’s bills, people’s ability to pay for the basics.”
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Worker Expresses Relief
Retail employee Marks King said the increase would help her save. “This means I will be able to not live pay cheque to pay cheque and I’ll actually make sustainability, make savings, and be able to afford things like a house deposit,” she said. “I have not made savings at all. I have been in debt.”
Broader Economic Benefits Anticipated
Ms McManus said the wage increase would help workers and businesses alike. “The very worst thing for small businesses is if workers’ wages are going backwards,” she said. She added that higher wages mean more customer spending. “So, that’s the little bit extra, it might be the coffee, it might be the sandwich, it might be a beer at the pub,” she said.
Government Stance on Wage Rise
Employment and Workplace Relations Minister Amanda Rishworth had earlier backed a responsible pay rise. “We do need to consider the economic conditions, but we also believe that in those economic conditions, workers deserve a real wage increase,” she said in May. She noted the Commission remains independent in setting the wage.
Millions to Receive Pay Rise
Government figures suggest up to three million Australians will benefit. Only a small portion earn the national minimum wage. However, 20.7 per cent of workers are covered by modern awards.
Previous Increase Slightly Higher
Last year, the Commission awarded a 3.75 per cent increase. This year’s lower rise reflects productivity concerns but still exceeds inflation.
Conclusion
The Fair Work Commission’s 3.5 per cent increase marks a shift after years of real wage declines. Low-paid Australians will soon receive an above-inflation boost, starting 1 July. The decision supports workers across vital sectors and aims to restore living standards.
