Minimum wage is unlikely to rise sharply

The minimum wage is unlikely to rise sharply this year after the Government’s Fair Pay Commission chairman Ian Harper warned that a large rise could lead to a surge in unemployment.

“The commission has to be mindful of the impact of the minimum wage on unemployment and also the role the minimum wage plays as part of the safety net,” Harper told The Australian Financial Review.

The news will be welcomed by employer groups, which have long argued that large increases in the minimum wage result in pressure for higher wages throughout the economy.

A large increase in the minimum wage would have been particularly unpalatable for business owners who are currently fighting to trim staff costs as the economic situation worsens.

Harper’s declarations come as new under-employment data from the Australian Bureau of Statistics shows the employment figures could be masking the real level of unemployment. According to the data, 23% of part-time workers would like to work more hours.

The Government continues to prepare for the ranks of the unemployed to swell. Yesterday it announced it will spend $300 million on initiatives for the recently unemployed, including 10,000 extra training places and measures to speed up job search programs.

Employer groups including the Australian Industry Group and the Australian Chamber of Commerce and Industry welcomed the initiatives.

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