Commentary
The Australian Fair Work Commission’s (FWC) recent decision to increase the federal minimum wage by 5.2 percent and 4.6 percent for award minimum wages was higher than most expected.
Usually, the FWC strikes a balancing act between the demands of unions and employer groups. But this year, there can be no doubt the commission sided with unions and the new Labor government.
Australians could be forgiven for assuming higher minimum wages will prevent a real wage cut in light of rising inflation.
But this is not the way to go about increasing wages. Instead, the unintended consequences will likely be accelerating inflation and higher unemployment….