Australia’s minimum wage has increased by 3.75%, it was announced by the Fair Work Commission (FWC) on Monday.

“Our decision today is to increase the national minimum wage and all modern award minimum wage rates by 3.75%, effective from July 1, 2024,” said FWC President Adam Hatcher.

“In determining this level of increase, a primary consideration has been the cost of living pressures that modern award reliant employees, particularly those who live in low income households, continue to experience.

“This is not withstanding that inflation is considerably lower than it was at the time of last year's review.”

Despite a 5.75% increase last year, modern award minimum wages in Australia have remained lower than they were five years ago, Hatcher added, saying it was “not appropriate” to significantly hike wages above the inflation rate as labour productivity was “no higher” than four years ago, and productivity growth has “only recently” returned to positive, Sky News Australia reports.

“The characteristics of employees who rely on modern award minimum wage rates and are therefore directly affected by our decision are significantly different to the workforce as a whole. They mostly work part-time hours, are predominantly women, and almost half are casual employees. They are also much more likely to be low paid,” Hatcher said.

“We have also taken into account that modern award reliant employees will shortly receive the benefit of the stage-three tax cuts and the budget cost of living measures which are projected to increase household disposable incomes over the next 12 months.”

Moreover, Monday’s announcement would be a “benchmark” for future wage growth decisions, according to Business Now host Ross Greenwood.

“Effectively, 3.75% translates to around $24.10 per hour, this is for minimum wage people and those people on those modern awards, which works out broadly to about $47,000 a year,” he stated.

Whilst Judo Bank economic advisor, Warren Hogan commented: “I think this was an excellent decision from the Fair Work Commission and it highlights the good work they've been doing for the past few years.”

“It was sensible, 3.75 was actually lower than I thought they would be and it is about in-line with inflation... it's a good outcome,” he added.