AIG calls for $14-a-week rise in minimum wage and delay for flood-hit employers

Business groups have called for a “cautious approach” to minimum wages increases in light of business and consumer caution, the effect of the strong Australian dollar on key industries and recent natural disasters.

The Australian Industry Group has called for a $14-per-week increase in the minimum wage from July this year, half of the $28-per-week rise the Australian Council of Trade Unions is pushing for.

The AIG says the rise would “assist the low-paid while not posing undue risks to the Australian economy.”

In its full submission to Fair Work Australia, AIG also wants employers badly affected by recent natural disasters to be granted a reprieve, until January 2012, for the wage rises.

It also calls for Fair Work Australia to give “specific consideration” to small- and medium-sized businesses, saying SMEs are more likely to be impacted by increases than their larger counterparts because a much higher proportion of their employees are “award-reliant”.

The Australian Chamber of Commerce and Industry is even more cautious.

Chief executive Peter Anderson told SmartCompany that with business still feeling the effect of last year’s record increase, $9.50 per week strikes the right balance for the 1.7 million employees at the heart of this decision.

Anderson also called for a deferral on disaster-affected businesses, this time for 12 months, and reiterated that the union’s push would add $3.6 billion to the annual wages bill for SMEs.

In its submission, the ACCI says “moderation” in minimum wage increases could create jobs for the disadvantaged, and called for the panel to focus on employees and employers most affected by its decisions rather than the broad domestic economy and larger international economies.

Noting the sensitivity of junior rates for some employees, the ACCI has recommended 18-year-olds be paid 70% of the adult wage, at $10.50. Nineteen-year olds are recommended to be paid 80%, or $12, while 20-year-olds would be paid 90%, or $13.50.

The Australian Council of Trade Unions is seeking a $28-per-week increase, with a 4.2% increase for other award workers.

Last year there was a $26-per-week increase, following a freeze in 2009.