The Fair Work Commission has released it’s Annual Wage Review decision today. Will you get a pay rise?
The Fair Work Commission (FWC) is Australia’s national workplace relations tribunal. It sets the national minimum wage and the minimum wages in modern awards. FWC reviews the minimum wage every year and makes a decision taking into account many factors, including inflation, the poverty line, potential effect on unemployment and other economic conditions.
The Fair Work Commission Minimum Wage Increase
The FWC released its decision today that minimum wage and all modern award minimum wages will increase by 3% beginning July 1st 2019.
This will bring the minimum wage from $719.20 to $740.80 per week, an increase of $21.60 to the weekly rate. This rise is lower than the two previous years, with 3.3% and 3.5% increases in 2017 and 2018.
The FWC president Iain Ross said that the decision took into account recent economic conditions, in-particular the lack of GDP growth and inflation. Around 2.2 million Australian workers will benefit from an increase in the minimum wage.
The FWC is confident that the decision will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment.
Australian Council of Trade Unions had called for a much larger increase, supporting the idea of a ‘living wage’. It still labelled the increase as a win and a welcome pay rise for millions of low paid workers, with a long way to go to ensure that minimum wage is enough for workers to live on and support their families.
However, other organisations were calling for lower increases with the current economic conditions. The ABC reported that Australian Chamber of Commerce and Industry (ACCI) and The Australian Industry Group (Ai Group) had pushed for increases of 1.8% and 2% respectively.
ACCI claimed that it’s harder for small businesses in-particular, and on those who are unemployed and under-employed.
The SMH reported that the Restaurant and Catering Association argued for a wage freeze, voicing concerns for businesses who employ less than 20 people. With many restaurants and cafes having to absorb these costs without an increase to business income.
This could have an effect on ASX businesses such as Domino’s Pizza Enterprises Ltd. (ASX: DMP), Retail Food Group Limited (ASX: RFG) and Collins Foods Ltd (ASX: CKF).
Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW) may also find themselves absorbing an increase in the minimum wage.
What Does This Mean?
With the unemployment rate rising, the RBA considering an interest rate cut for June and wage growth at historically low levels, the economy is looking pretty flat. Some ASX businesses may feel the pinch even harder with a rise in their minimum wage costs.
With current economic conditions, it’s important to pick quality shares with sound strategies. The next shares for your portfolio to weather the tougher times might just be in our free report below.
Here are 3 stocks I own in April 2020...
Amidst the COVID-19 confusion, there are some companies still growing FAST (think: online meetings through Zoom, streaming companies like Netflix and eHealth services provided by Teledoc).
While the world grapples with COVID-19, some companies are still growing rapidly. The entire cloud computing market is valued around $US210 billion but if you ask me, it seems clear as day that this market is only going to get bigger in 2020 and beyond.
That's why our top investment analyst has just identified 3 growth stocks in a net cash position, with strong competitive forces... and obvious tailwinds at their back. He owns all three of them right now!
Claim a FREE investing report on our analyst's "3 best share ideas for the cloud revolution" when you create a free Rask Australia account.
Our report is 100% free and unlocks hundreds of hours of bonus content.
Disclaimer and warning: The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms of Service and Financial Services Guide before using this website.
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.