The Fair Work Commission’s decision to raise the minimum wage by 3.5 per cent has prompted fears from employers and employees alike.
Russell Zimmerman, the executive director of the Australian Retailers Association, expressed concern the pay rise may cause joblessness to increase.
“By bringing up the price of each worker’s labour, it means retailers now need to look at how many hours they can offer, and how many employees they can afford to keep,” Mr Zimmerman said.
Retail sales figures have declined across the country between March and April this year, with clothing retail falling the most dramatically.
“To cut costs, we’re worried retailers will have to cut staff or cut their hours, and really the effect that has is actually making people’s jobs less secure,” Mr Zimmerman said.
That is a decision Tanya Hardwick is familiar with. She and her partner Adil Khan have owned and operated Sonda Cafe for the past two years. When their employees moved on, they decided to rehire.
“We had to weigh up that extra cost of having employees, but we figured we could manage it on our own for the time being,” Ms Hardwick said.
“It would be nice to have people [working for us] so that we can take some days off,” she said.
Australian Industry Group Riverina manager Tim Farrah sees the increase in business overheads as an unstable force in Wagga’s job market.
“We’re very close to having the highest minimum wage in the world, which is great if we’re also seeing high productivity,” Mr Farrah said.
“Costs for electricity or gas has gone up, and profits are down, so it’s not a good combination and it puts some businesses at risk of closing. Employment growth will not improve unless we lift productivity and global competitiveness.”
The wage increase will translate to an extra $24.30 in the pockets of some of the region’s lowest paid workers. For those on the coalface, like 21-year-old cafe worker Ellie Sales, it is welcome but insufficient.
Ms Sales moved to Wagga from the Gold Coast to study at Charles Sturt Univeristy. She does not qualify for government assistance and is currently living in a sharehouse with six others to keep the cost of her rent down.
“During exams I can’t work as much and then I have to be careful with money. It sometimes means I have to buy lower quality food,” Ms Sales said.
“For me personally to be living a little more comfortably, I’d have to be earning an extra $50 to $100 a week.”