Modest wage increase needed to protect jobs

Friday 28 March, 2014

The Chamber of Commerce and Industry Queensland is urging the Fair Work Commission to consider Queensland’s high unemployment rate when deciding whether to increase minimum wages following this year’s Annual Wage Review.

It comes as submissions for this year's review close on Friday morning.

CCIQ General Manager of Advocacy Nick Behrens said four consecutive increases since 2010 had seen the national minimum wage increase by 14.4 per cent, or $4,072, despite business trading conditions remaining challenging.

“This increase is well above CPI and productivity growth for the same period, particularly in 2012 and 2013," Mr Behrens said.

"Unfortunately many businesses have taken a hit to their profitability on the back of the increased wage costs associated with these decisions.

“CCIQ recently surveyed more than 700 Queensland businesses with 49.4 per cent of respondents attributing a drop in profitability to their mounting wages bills.

“We are proposing a modest $8.50 weekly increase, which would offset to a degree the large increases of the previous two years.

“One in five business reduced their employment levels as a result of last year’s increase, while a further three in five business struggled to maintain their current levels.

“This shows just how much trepidation businesses have towards employing under this sustained pressure.

“It appears businesses are trying to preserve jobs but almost a third were still forced to reduce the number of hours offered as a result of the decisions.”

Mr Behrens said the danger of an increase like the $30 per week proposed by the unions last year, was the potential for businesses to stop employing to counter their wage bills.

“Despite improved business confidence during the past two quarters, businesses are reporting their profitability is still struggling and any significant increase will ultimately deter them from employing people,” Mr Behrens said.

“We anticipate that Queensland is a few quarters off genuine improvements in business profitability but further increases could see some businesses become no longer viable.

“Queensland’s unemployment rate is currently at 6.1 per cent, compared to 5.8 per cent this time last year.

"We need to be encouraging businesses to employ and we believe a modest increase to the minimum wage, as opposed to the significant increases of recent years, will do this.”

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