National retailers and retail associations have reacted angrily to the recent decision by the Fair Work Commission to increase the minimum wage by 3.5 per cent.
The decision, announced on June 1, 2018, has led to national associations and retailers reporting that the increase, effective from July 1, will stifle jobs growth within the retail sector and, in some cases, according to Master Grocers Australia CEO Jos de Bruin, “retailers will look to put staff off rather than increase job opportunities”.
Nation Retail Association CEO Dominique Lamb said, “The decision by the FWC is disappointing considering the difficult retail environment at present. Many retailers are confronting extraordinarily challenging trading conditions and they are crying out for help. This is the biggest increase in the minimum wage in recent memory and we are concerned that it will result in fewer jobs in retail.”
Speaking to Retail World this morning, ARA Executive Director Russell Zimmerman said he wasn’t surprised by the announcement but that the increased amount did shock everyone.
“It gets done [FWC national minimum wage increase] every 12 months, so it’s nothing unusual,” he said. “We were very aware it was going to come through, but it’s fair to say any increase over 1.9 per cent is going to be very difficult for retailers to sustain. Research was done on retailers in the UK after a similar increase and the retailers said they were going to reduce staff over the next few years.
“I think retailers are looking at this very closely and some of them are feeling, when this bites in, they may have to look at reducing staff over a period of time.”