Already a subscriber?Economists are warning that raising the minimum wage by anything more than 4 per cent at a review next week would complicate the Reserve Bank’s battle against inflation and the path to rate cuts.
Last year, the commission lifted the minimum wage by 5.75 per cent, the largest increase in at least a decade, fuelling concerns it would further stoke inflation. Yet, there has been no damaging wage-price spiral and inflation has cooled to 3.6 per cent, from a peak of close to 8 per cent. But at a time of high inflation and interest rates, he argued, lower-paid workers felt the squeeze much more than others, and as a society, it was fair to push for higher pay for low-income workers.
Judo Bank chief economist Warren Hogan said a lift to the minimum wage of 4.25 per cent would be too high because it needed to match the current rate of inflation.
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