Minimum wage decision disappointing for retailers
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Minimum wage decision disappointing for retailers

June 01, 2016

The National Retail Association (NRA) has today warned that the Fair Work Commission’s decision to lift the national minimum wage by 2.4 per cent could force job cuts across the retail sector as SMEs struggle to cope with the added financial impost.

NRA CEO Ian Winterburn said the awarded increase, which translated to $15.80 more per week, could unfairly penalise young people, in an environment where youth unemployment was already soaring.

“The NRA proposed a sensible 1.6 per cent increase, which was calculated with regard to the economic trade-offs between factors such as unemployment levels, productivity gains in the sector, business conditions, and the inflation rate as a measure of the increased cost of living,” Mr Winterburn said.

“The 2.4% increase, which is above the current rate of inflation, seems to imply that there is a significant productivity component included in the decision.
“This is contrary to the conditions that are currently being experienced in the retail industry.

“It highlights a fundamental problem with centralised wage fixing decisions, which do not adequately consider the economic conditions that exist in individual industry sectors.
“Our proposal was the same as that of the Australian Industry Group, however a number of other groups proposed much lower increases.

“We believe our proposed 1.6 per cent would have been a far more equitable outcome in the midst of a very challenging economic period, and at a time when retail employers are facing unprecedented competition from online, overseas-based retailers,” he said.

The NRA has commended the Fair Work Commission however on its decision to reject the the Australian Council of Trades Union’s proposed increase of $30 per week.

“We understand that it can be extremely difficult negotiating workplace relations, particularly given the current climate of youth unemployment and lack of consumer confidence, however we were determined to position our sector as a reasonable, sensible alternative to other groups making extremely high or low proposals.

“Today’s announcement will only hinder the domestic retail industry, which is already held back from increasing staff or hours amid the often unavoidable trade-off between jobs and wage increases that haven’t been strongly linked to productivity or efficiency gains.

“Australian business owners are already dealing with some of the highest wages in the world, so we do hope to hear better news from the Fair Work Commission after the July 2 election, to bring Sunday rates into line with Saturday’s,” he said.

The 2.5 per cent increase will be applied to industry awards including those covering the retail, fast food and the hair and beauty sectors.

“This has the potential to be quite damaging for both businesses, workers and consumers considering the current economic climate, and could leave some workers worse off in the long run,” he said.

Ian Winterburn is available for comment. Please phone the NRA’s media unit on (07) 3240 0163 or 0467 792 013.

The NRA is Australia’s largest and most diverse retail industry organisation, and has been representing the interests of the retail, fast food and broader service sector for almost 100 years.

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