Predicted Australian retail wage hike as talent war eats away at margins

The Australian Council of Trade Unions has pushed for a 5% increase in the minimum wage in submissions to the Fair Work Commission’s annual wage review due to be completed by July, while the Australian Retailers Association ( ARA) called for a “measured increase”.

“We believe a pay rise is inevitable,” said ARA chief executive Paul Zahra. “However, we believe that this wage increase should be based on the actual rate of underlying inflation, less the impact of pension increases. »

Australian Retailers Association boss Paul Zahra.Credit:Alex Ellinghausen

Zahra said rising operating, freight and packaging costs had been absorbed over the past few years, but retailers now had “no choice but to pass on the higher costs on consumers”.

Former Myer boss and retail veteran Bernie Brookes backs a minimum wage hike but said her company, handbag and jewelry chain Colette, is already paying more to lure managers from store and IT professionals.

“There’s a bit of a talent war going on,” Brookes said. “The world has changed and a lot of people aren’t ready to work five days a week in a grocery store or retail environment. »

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Bunnings human resources director Damian Zahra said staff received a salary review each year that took inflation into account. Difficulty hiring in-demand positions continues to affect the hardware chain, while a Coles spokeswoman said there were new recruitment processes for the supermarket giant after “labour shortages”. unprecedented work” at the end of last year.

Michelle Bilston, a retail worker in Melbourne for 35 years, said her pay rises over the past five years had not kept pace with rising bills for rent, groceries and utilities public.

Her last raise was about $10 a week, but she said she now spends $50 more a week than before the pandemic. “If I lost my job tomorrow, it would take me a few weeks before I could no longer pay my rent,” she said.

Grattan Institute’s economic policy program director Brendan Coates said businesses should expect higher wages due to low unemployment, but it would take until 2025 to offset rising wages. wages of workers in line with inflation over the past decade.

Treasury figures show wages rose an average of 2.3% per year for the 10 years to December 2021, while the CPI had risen at an average rate of 2% per year.

“Right now people are recoiling because of these global supply shocks, there’s not much policymakers can do about it – when you have a global supply shock it makes people poorer,” Coates said.

“It’s going to take time, but you’re much more likely to have real wage growth with low unemployment. »

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