From a retailers perspective, the increase in minimum wage is not going to help anyone. Some retailers are struggling to remain afloat, so adding the extra burden of a wage increase, on the same day the country will be hit with carbon tax, is just another nail in the coffin for a lot a small businesses. And for those that receive the increase, will it even be substantial enough to cover the increased costs associated with the carbon tax or the impact that the scaremongering around this tax and subsequent impact on consumer confidence will have?
Fair Work Australia announced that minimum wage will increase to on 1st July to $15.51 (or $17.16 for apprentices). What might seem a small amount to the feuding unions is a large expense to employers: those that are dealing with a large number of junior staff and those that are struggling to make ends meet as it is . This will lead to hours being cut, and new job opportunities hitting a brick wall.The Australian Chamber of Commerce has said the rise should be limited to $9.40 a week to “reflect inflationary pressures” and that the decision for “increases ranges from $17.10 per week to $30.00, depending on the prevailing award, is a significant and costly impost.”
A recent survey run by Retailworld indicated that less than 45% of retailers are already considering a wage budget increase over the next 12 months.
So, what does that mean for retail?
- Hiring freezes
- New job opportunities put on hold
- Current employees could lose hours (particularly those on casual contracts)
- Product prices will rise to maintain margins that are already at a minimum
- Ultimately small to medium businesses will find trading conditions even tougher and many may continue with their struggle to survive