Minimum Wage Rise Expected to Cost Jobs
Posted March 31, 2017
Written by Hospitality Magazine. Restaurant & Catering Australia (R&CA) has urged the Fair Work Commission to exercise restraint in its submission to the 2016-17 Annual Wage Review.
R&CA has argued that, in light of Australia’s current economic conditions, last year’s 2.4 percent increase in the minimum wage is sufficient for both this and last year’s Review.
R&CA CEO John Hart said “What’s clear is that, in hindsight, Australia’s economic conditions haven’t kept up with the 2.4 percent minimum wage increase announced in the last Annual Wage Review in 2015-16.
“Subsequently, a zero increase in this year’s Review is necessary to rectify the Commission’s overreach in 2015-16.”
Hart said that the Fair Work Commission’s decision on the minimum wage also needed to recognise that service-based sectors are disproportionately affected by increases to the minimum wage.
“As Australia continues to shift towards a more services-based economy, it is important to recognise that any increase in the minimum wage has a far greater impact on heavily Award reliant sectors like cafés and restaurants.
“Wage costs are fixed costs for these small businesses and an increase in the rate equals a reduction in hours or a reduction in staff.
“Another increase in the minimum wage on top of the 2015-16 decision will cost jobs in this sector as business owners will either be forced to close, reduce hours or work themselves to cover the increase in wage costs,” Hart said.