Who's excited about their 5.75% payrise?
Doesn't cover the fact that my favourite frankfurts have gone up by at least 50c at Aldi (still @ $2.50 cheaper than Colesworth).
Not to mention KFC price rises, Guzman, Maccas etc
Who's Excited about Their 5.75% Payrise?
Comments
@GourmetFoodie: No they have their labour costs increase by 5.75% and use this as an excuse to increase retail prices. Haven't you noticed all the reports of record profits? If the business can increase prices this is the excuse, they will be more than covering their increased cost by raising prices only 3%, but they will push for much more.
This is only relevant for the business that both hire at minimum/award wages and can pass on costs, basically food retailers and restaurants. Most businesses will eat the cost.
To say that increasing minimum wages 6 months after inflation figures are published causes inflation is basically a joke.
House prices increased 30% in 2 years, adding $3000
millionbillion in equity to the economy. Thats the cause of inflation, not people on the dole buying an extra coke at the fish and chips shop
@greatlamp: Yep. This is all at best half true (or not telling the whole picture). If this is true, why hospitality and retail are mostly suffering and look at the "For Lease" signs everywhere.
Factors affecting prices are always in this order.
1. Price people are willing to pay in absence of competition (eg: Australia Post's recent >10% increase)
2. Competition (like now, people are posting discounts and suddenly others are joining the fray)
3. Cost plus margin.As (2) are getting less and less, (1) is proliferating. This is why people can now jack prices with no fear of competition because there are less of them. Another factor is that because of "sheep" mentality, over time people are accepting the high cost and no backlash. Once entrenched, businesses are starting to charge "surcharges" starting from public holiday 5 years ago to now weekends (eg: Pancake Parlour).
7 years ago $1 fuel was seen with disdain and boycott. Now, people are already resigned to it because fuel pumps are no longer fear of competition. They become collusive.
Dwelling price increase is again due to collapsing builders and thus less competition. That drives the HOUSING component of the CPI calculation. New buildings NOT existing buildings as you may seem to imply (ie: You seem to imply people's greed / wealth drives housing price rise).
https://www.rba.gov.au/publications/smp/2019/may/box-c-housi…
ie: You seem to imply people's greed / wealth drives housing price rise
I don't think I implied that at all, but I agree that isn't correct.
The housing component of CPI is part rent costs, part mortgage costs and part the cost of construction. It excludes the cost of land (iirc). So the actual increase in house prices that matter (house + land) isn't reflected in CPI at all.
@burningrage: I agree to a point. But I recall that fuel hit $1.7 for a few months around 7 years ago. It's been over 20 years since sub $1 was the norm.
@greatlamp: No, it isn't just labour costs that increase; although most employees only think of their wages. But their super goes up; work cover expenses & other costs also rise for the employer.
Every input of service, stock or materials into their business from other providers has now had to go up as well, as those businesses have increased labour costs. So costs across the board in all business will now increase.
Sometimes I wish I was just an employee, collecting a pay check AND a payrise, & simply thinking it only adds 5% to my pocket without affecting the entire system.
businesses now have their costs increase by 5%
That would only be true if the labour of minimum wage & award workers made up about 90% of a business's costs. That woud be extremely rare.
@greatlamp: Thats not quite correct. Inflation is based on a basket of goods of which many are essentials. So increasing demand for essentials will impact on inflation (and as bad as it sounds, increasing the number of people being able to afford an essential adds to that demand). So his comment is not wrong in that adding more money to a money problem doesnt solve the problem. In an ideal world, a better fix is to increase supply.
@FlyingMiffy: Every grain of sand contributes to the beach. The idea that giving minimum wage workers a raise causes inflation is a peverse interpretation of what is actually happening - compensating minimum wage workers for the inflation that occurred last year by giving them a raise less than inflation.
They aren't partially correct, this isn't a significant driver of inflation.
I love how everyone complaining about this is clearly not on minimum wage at all
Maybe they should take paycuts to make up for it? ;)
Everyone will be paying higher prices for good and services to make up for it
we already do. woolies and coles already upped their prices not once but twice no thrice. even before covid, during covid and now that we are after covid they did it again for inflation. They're going to do it once more because everyone had a pay raise? nice.
@iLikeSales: Shop at Aldi if you can. I started recently and it seems like I'm spending like 30% less.
@idonotknowwhy: I keep forgetting about Aldi LMAO I think I will now. It's funny when Colesworths gets brought up I actually never hear about Aldi.
Rates are increasing regardless of what minimum wage is, at least this way people will have a bit more money for when prices do rise again
Reread what was written. Rates, and rents, are increasing because of things like this. Injecting more money into the economy, while the same amount of work is being done, increases inflation. This causes the RBA to increase rates, which increases rents, which costs the people on minimum wage more than this increase.
@brendanm: All im trying to say here is that a small amount of extra income for those who earn the least is not the main problem for inflation in this country. Rates and rents are increasing regardless and if this 2 bucks extra an hour keeps people from dipping into savings then it might be slightly worth it.
@GooseLord: Of course it's an inflation problem, businesses aren't just going to absorb this cost, they are going to pass it on. So the prices on everything increases to cover it.
if this 2 bucks extra an hour keeps people from dipping into savings then it might be slightly worth it.
It's not going to, as the extra $2 an hour is going to be eaten by the increased cost of everything from inflation, and the massively increased cost of rents when rba yet again raises the rates, and the government imports even more people. But sure, the promise of the extra $2 an hour might placate some for a while, thinking they are getting a great deal.
@brendanm: I dunno man all im saying is as someone who is clearly not on minimum wage, nor an economist I don't see why you would fight against people getting a little more amid more rises to everything
@brendanm: You call taking a trivial amount from the rich to give the least paid a bit more hope to survive
Injecting more money into the economy
Not sure if you're just a class traitor or a sophisticated shill demonstrating how the working class does more trickling than the trickle-downers have ever promised.
@afoveht: Look, i know brendanm is barking up the wrong tree by thinking this will be a significant driver of inflation, but
You call taking a trivial amount from the rich
the rich never pay up, it's the middle and working classes that are burdened with the ever increasing taxes to pay for the poor (communism) and rich (late stage capitalism).
@ssfps: I actually did a quick comparison of 2003 tax rates. After stage 1&2 rate cuts someone on 80k will be paying 5% less tax compared to 2003. Without any cuts, someone on 200k is paying 15% less. Come stage 3, that 80k person is paying 5% less, but 200k is paying another 15% less.
Trickle-down economics. They really want the top 1% to own more than just 25% of all investment properties.
@filmer: That's interesting, but of course income tax is only one of the many ways we're taxed - and our taxes are generally setup to make us worse off as currency devalues.
I'm also curious if your figures are taking into account stuff like FTB, medicare levy/surcharge, etc?
Fun fact, median rents in Australian have gone from $450 a week in July 2019 to $580 a week in May this year. 29% is a big increase, but in that time the minimum wage has gone from $740.80 to $882.90, just a 19% increase.
It wouldn't surprise me that with more people hunting cheaper housing and the sentiment that poor people suddenly have more money that they'll be squeezed even harder on rents. A home is the last place people are willing to leave and will cut all other costs first. Shitty situation to exist.
Just follow Phillip Lowe's advice, share a house, one family in each room, you can pretend you're in a 3rd world country while paying that pricks salary.
Going by that logic then a wage cut would be beneficial for the people on minimum wage?
Going by that logic then a wage cut would be beneficial for the people on minimum wage?
I'm sure that Innes Willox from the Australian Industry Group would agree with that!
Proven false in many case studies, this line of thinking is only used to spread a false narrative so that the power brokers can keep public spending low and justify tax cuts for the rich.
How's it working out so far?
@brendanm: Heard of the stage 3 tax cuts and the cut to the corporate taxes to 25% for 'small' businesses that turnover less than $50 million a year, while we have had Medicare rebates frozen for years, and now only unfrozen but still increasing below the actual cost of medical care (which is increasing much higher than CPI - hence why the NDIS costs are increasing so rapidly).
It isn't about small government, it's about a government that suits the wealthiest
@greatlamp: Corporate tax should be actually paid, not dodged.
NDIS costs are through the roof because the entire scheme is being rorted.
@brendanm: The NDIS amalgamated several smaller schemes and made the costs more visible. Why would there be more scam claims now than before?
Don't confuse genuine criticism with political manoeuvring.
I agree corporate tax should be paid and not dodged.
What brendanm is saying is true. You can probably be confident the next time RBA meets will be a rate hike.
It may not be much but millions of that "not much" is material enough.
Except rent prices aren't caused by interest rates, they're caused by supply and demand. Both of them going up at the same time at the moment is just a coincidence.
You think people on minimum wage have a mortgage ? lol
Where did I say they had one?
@surg3on: Did you read any further? If they are renting, rents go up, as interest payments on I vestment properties increase, and owners pass on the increase in costs.
@brendanm: When have you ever heard a landlord say anything other than 'I want the maximum i can get out of my tenant!' How does that change when rates go up or down?
Rising interest rates have NO BEARING on rents.
@brendanm: Just do this thought experiment. You are paying $500p/w on average in your suburb. Pandemic hits and the landlords interest expense halves as rates go from 6% to 3%. How much do rents go down?
So i dont get this rise but its going to make my mortgage interest rates go up. WTF.
So i dont get this rise but its going to make my mortgage interest rates go up. WTF.
No it's not.Interest rates will go up because our dollar is weakening and house prices are still increasing. Our cash rate of 3.85% is still very low compared to many other countries.
At least any payrise that YOU get won't increase interest rates, eh.
It is a vicious cycle now. Raise wage, cost of doing business increases, price of commodities goes up, RBA raise interest rates, landlord mortgage increases, rental goes up, CPI basket/inflation goes up, repeat cycle.
you forgot the bit where you import 2 million more over 4 years to accelerate the cycle even faster…..
Pauline Hanson must be so happy these days.
This is what the RBA is afraid of
That moron Phillip lowe even admitted this the other day, yet it's still going to happen.
You should voluntarily refuse a payrise
It is starting to feel like persistent inflation. What i dont get is why the focus is on demand demand demand. Maybe supply is too hard for government…
landlord mortgage increases, rental goes up
Rents are not driven by interest rate increases despite what people say, they are driven by supply and demand. The reason why rents are going nuts at the moment is because vacancy rates are extremely tight. This is due to the immigration floodgates opening again. It just so happens that interest rates have correlated with immigration levels in recent years which gives the illusion that rents are driven by interest rates.
All of what you've said (except for what I just mentioned) is what happens after a decade of ever-decreasing interest rates globally. I know not everyone will understand because they don't work in corporate environments, but there have been many roles and companies that have opened up in the past decade that are so fluffy and silly the only reason they exist is because of cheap money. Take for instance UI/UX design; that is a role purely created so someone can spend 8 hours a day asking questions like "Should the button be blue or green?" and "Should the navigation bar be on the left or top?". Whilst there is definitely value in designing things to be intuitive, in my opinion we don't need SMEs telling people how a nav bar should be designed on a website or what colour a button should be. I've been in various organisations and have seen how fat some departments are, and these departments are full of people who can't handle an eight hour work day and think being "busy" is working for four hours a day.
It made absolutely no sense for interest rates to ever go to 0% and now that they are sitting around a long term average of 3%-4%, uneducated fools are all up in arms because they followed the market like sheep and borrowed silly amounts of money for a house and are now feeling the impacts of not-so-cheap money.
I was thinking recently that I'd be surprised if prices for things actually go down. Once companies are used to higher profits I don't see how they will be benevolent enough to decrease prices again, which is why the RBA needs to pump up rates more and stop the profiteering as soon as possible.
Hard to swallow?
can anyone translate this?
As someone who will soon be on Parental Leave Payments (which is paid at minimum wage)…Thanks?
Good point.
5.75% is way too high an increase.
Our Minimum wage is already very high before this.
Minimum wage in Japan (including the 2023 increase) is 961 yen (AU $10.48) per hour. Not saying Australian minimum wage is too high. But Japanese minimum wage is definitely too low. Gives us some perspective.
choices…..? to starve, to be homeless, to die?
those sort of choices…?Yeah, nah, we don't need what America has.
lol and be like USA and rely on tips? HA
Living cost is very different between the 2 countries though. Having lived in both, the prices in Aussie made my eye watery when I first moved here.
For a quick comparison, a cheap meal in Japan can be a bowl of gyudon costing under 400 yen ($4.35). I used to spend my student days going to AYCE paying 1500 yen ($16.3) or less. A cheap meal here is on average $10 or more.
your perspective is narrow.
Japanese average wage is lower.
Cost of living in Japan is lower.
compared to 'some parts' of the world….sure
But CPI is like 7%, and rents are going up by even higher percent. 5.75% might be too low, especially considering minimum pay rises don't affect people already making more than minimum pay.
Ever lived on minimum wage?
It's less than inflation, so the people getting a raise with this will be earning less than the year prior.
They will be earning more, but their spending power will be less, especially after tax.
Big biz can easily afford this but definitely a lot of small biz are finished with this increase.
most big businesses (say coles-worth) already pay more than the minimum wage according to their enterprise agreements so its probably the small businesses and child care (I think ?) who would be impacted the most.
I am all for increasing low wage income as they are people with less disposable income.
Meh, small biz hanging by a thread probably should go bust and be replaced by new small biz that are prepared to face modern economic realities. Society is under no obligation to keep 20th century businesses models on a lifeline, whether they are 70 year old builders or corner cafes.
I'm in a small business, we are around $29 for our lowest wage earner. You won't be able to hire anyone on minimum wage these days, there are too many jobs available. Workers need to go look around instead of accepting minimum wages.
Those on minimum wage cheering should have a backup plan, perhaps learning how to program a robot to make a burger.
You all get a payrice??
Yes. Basmati. ;)
Sounds like you're above minimum or award. Shop around. Its an employee's market.
Loyalty doesn't pay the bills.
My pay rise this year was 0%, so I wouldn't cry too much about 5.75%
Me too. They reckon I was "overpaid".
Met too. I had a $1 Payrise in 2020. I think there have been 2 in that time?
Your employer thinks you deserve a real pay cut of about 7%. Time to get a new job.
If only you were on minimum wage you would get an extra 8.6%. Them's the breaks!
Wish it would be higher as my employer pays above min. Barely inflationary, but also we gotta protect the billions in profits from the poor even if inflation goes crazy! Labor protecting wealth class over the workers again
You should read the accompanying reports published with the National Minimum Wage order. The minimum wage is set independently from government, but the panel clearly considers the welfare of people like Gerry Harvey and the impacts of wages on business activity as their first priority. Hence this increase significantly below CPI.
The minimum wage is set independently from government,
Yes..
The Liberals and Nationals spent a decade stacking the Commission with appointees from employer backgrounds in a bid to silence workers. … This is the second round of appointments the Government has made to the Commission. But even with these appointments we are still short of balance. There is more work to do to correct the Coalition's shameless stack.
and no
https://ministers.dewr.gov.au/burke/appointments-fair-work-c…
Yeah, they are definitely prioritising businesses. FWC are even concerned that there's going to be a potential recession and decided not to raise wages as much. Wtf, people are asking for a raise to match inflation over past year and FWC are trying to crystal-ball gaze? They are not the RBA. Twats.
It's all right there in their own report, the real value of the minimum wage is falling, and thats already ignoring that essential goods and services have been increasing in price faster than CPI
These increases do nothing to help people that are not quite minimum wage but being underpaid for the type of job they're doing. The middle continue to edge toward the lower tier and eventually the same thing will still happen, no more middle.
They should join their union.
Unions are largely toothless, if not outright corrupt. Never joining one again.
Unions are largely toothless because people don't join. Save $10 per week (tax deductable) and pay and conditions go backwards. There are some very strong unions, and they all have very strong density rates.
ICU nurse here, Looking forward to my 3% payrise that will take it to $38 an hour. Yea nah. Will be poor forever..
Should definitely work private or leave industry. "Care" industries are often ripe for kicking down in order to keep costs low.
Banks make record billions in profits but when the poorest workers get a below-inflation pay rise, everyone loses their minds.
You deserve more money than those on 80k a year are.
I am on $25 an hour at my main job, working 33 hours a week. I am at breaking point yet again, and will be taking on a full time job, to help combat working extra. So no holidays for 6 months, and no weekends.
higher inflation….will ultimately make us all poorer
anybody championing this decision doesnt understand basic econmincs
And your alternative to tackling the high cost of living to the poorest workers?
Just let them fall even further behind?
@greatlamp: What you don’t understand is that it’s not about the poor spending but businesses now have their costs increase by 5%. They now pass this onto their customers.