By James Glynn
SYDNEY–Australia’s Fair Work Commission has awarded low-paid workers a 5.75% wage rise, and said that the decision won’t fuel a wage-price spiral.
The increase, which will go to around 25% of workers, is smaller than the 7% rise many economists had expected.
The cautious increase will help ease concerns at the Reserve Bank of Australia that inflation could remain higher for longer if there’s a broad surge in wages growth across the economy.
“We have had regard to the need to avoid entrenching high inflation expectations by taking a perceived wage indexation approach and also the recent weak performance in productivity growth,” the FWC said.
“We are confident that the increase we had determined will make only a modest contribution to total wages growth in 2023-24, and will consequently not contribute to any wage-price spiral,” the FWC added.
Still, the FWC said the increase was needed to help low-paid workers recover income that would otherwise be lost to inflation, which rose by an annual rate of 7% in the first quarter.
“Inflation is reducing the real value of these employees’ incomes and causing households financial stress,” the FWC said.
Write to James Glynn at james.glynn@wsj.com
Read the full article here
