ARA: Wage hike will cost jobs

NATIONAL: Peak industry body the Australian Retailers Association (ARA) says jobs have been placed in jeopardy because of the Australian Fair Pay Commission's (AFPC) decision to raise the minimum wage. The raise, which amounts to an increase of $21.66 per week or approximately 57 cents per hour, was announced in Melbourne on July 8 and is expected to come into effect from October.

ARA executive director Richard Evans, whose organisation represents more than 5000 retailers across the country, said while the ARA understood the AFPC's decision was a response to inflationary pressures, it was also "risky policy".

"Retailers are already under severe financial stress due to a drop in demand and the Reserve Bank of Australia's attitude to demand driven control of inflation. Retail demand in Australia is a barometer of the economy and if it is struggling it is a sure sign that times are tough."

Evans said it was likely the minimum wage increase would be passed onto consumers already facing the burden of increased petrol prices and rising interest rates. This would now threaten jobs because smaller retailers simply couldn't absorb another blow, he said.

For it's part the Federal Ministry for Employment and Workplace Relations said the increase would help Australia's lowest-paid workers keep afloat as the cost of living rises.

Unions had been pushing for a $26-a-week increase.