The Australian minimum wage should increase in line with improved productivity arising from technological advances, the union for retail workers has argued.
The Shop, Distributive and Allied Employees’ Association (SDA) has pushed for tougher IR reform in a submission to the Senate Select Committee on Adopting Artificial Intelligence. The committee is to inquire and report into the opportunities and impacts for Australia arising out of the uptake of AI technologies.
“Our society has dealt with significant advances in technology and productivity before and the lesson is that those gains must be reflected in wages, or the social contract will break,” the SDA campaigned.
“Low paid workers have demands put on the scarce resource that is wages. If the wages go up, they spend that money in ways that increase productivity. The economic cycle that retail workers support is critical to economic recovery. That means, minimum wages must increase, especially for those in low paid, feminised and youthful workforces.
“Now is the time to ensure the Australian industrial system also responds to the evidence and we increase our minimum wages in line with improved productivity arising from technological advances.”
The SDA said it would continue to campaign for increases in wages, including through the Annual Wage Review.
“In 2022 and 2023, the debates around the quantum of those increases were fierce," the SDA argued. "Employer groups sought cuts and delayed pay, they argued that productivity had slowed, despite record profits and productivity growth - productivity grew by 2.8 per cent for the year to March 2022, while wages went backwards in real terms by 2.7 per cent over the same period.
"The decision in 2022 was an increase, and despite the views put, employment strengthened over the following 12 months.”
However, The Australian Retailers Association (ARA) warned against increasing pressure on retailers after this year’s Annual Wage Review in June.
The Fair Work Commission announced it would increase the modern award rates of pay by 3.75%, in addition to the scheduled 0.5% increase in Superannuation Guarantee Rate. This meant the increase in wages for businesses were at 4.25% from 1 July, 2024.
At the time, ARA CEO Paul Zahra said while it is important that wages keep pace with inflation, the move would increase pressure on struggling retailers.
“With discretionary spending slowing and operating costs rising across the board, wage increases without productivity improvements place businesses, particularly small businesses under significant pressure and can ultimately lead to price increases.
“Wage growth is important; however, we have consistently advocated that any increase must reflect the context of inflation moderating, the decline of labour productivity and the cost-of-doing business challenges.”