The National Retail Association has blasted the national wage increase as “completely out of touch with reality”, with industry groups joining the backlash.
National Retail Association CEO Dominique Lamb expressed concern the figure will simply add to inflationary pressures, which the Reserve Bank today warned could hit seven per cent by the end of this year.
“This increase is completely out of touch with the reality of modern business, and it will result in many workers losing their jobs,” Lamb said.
“This comes on top of two recent interest rate hikes, which will drive up overdraft and business loan payments, and will coincide with the 0.5 per cent jump in superannuation from July 1.
“It will be the third strike for retailers, many of whom have not been able to pay their rent for the last two years and are also facing increase input prices, particularly in the restaurant and fast food sector.
“The simple fact is that when businesses don’t have enough money to cover their expenses, they need to cut costs. There is no doubt that those cuts will lead to job losses in retail and no doubt in other areas of the economy as well.”
Lamb said the Fair Work Commission had taken the extraordinary step of exceeding the initial ambit claim made by the union movement, of 5.0 per cent, and almost matching the ACTU’s even higher revised claim of 5.5 per cent.
“Employer groups, including the NRA, have tried in recent years to propose modest but affordable increases for our valuable staff.
“Sadly, it seems this reasonable attempt at finding sensible middle ground has backfired.
“When the Commission pays no attention to our concerns and simply listens to only one side of the argument, it may be time for employers to stop trying to be reasonable."
The Australian Retailers Association (ARA) said today’s decision of the Fair Work Commission to increase the minimum wage could tip some businesses over the edge as costs continue to rise.
The ARA’s submission was for the minimum wage to increase by 3.2%, which took in account the intense cost pressures businesses are under, while ensuring the wages of frontline workers could keep pace with the rising cost of living.
ARA CEO Paul Zahra said the Fair Work Commission’s increase to the minimum wage is the highest in more than two decades, and it comes during an incredibly challenging economic environment for Australia’s retailers.
“The cost of business is a pressing concern and comes as retailers deal with intense challenges,” Mr Zahra said.
“Acute supply chain issues, staff shortages and the rising cost of energy, fuel and materials is creating unprecedented financial pressure. Whilst the ARA supported a fair and balanced increase to the minimum wage, we fear the scale of this increase could tip some businesses over the edge.
“The Superannuation Rate Guarantee is also increasing from 1 July, which is another cost that businesses have to factor in, on top of the inflationary pressures they’re currently experiencing.
“Our economic recovery is uncertain, and with interest rates on the rise and families set to tighten their household budgets, consumer spending is likely to slow in the months ahead posing more challenges for discretionary retailers.
“Whilst the ARA supports an increase to the minimum wage for our frontline teams, the scale of this increase from the Fair Work Commission could send some businesses to the brink.”