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Economist Richard Holden has joined the conga-line warning that yesterday’s decision by the Fair Work Commission (FWC) to lift the minimum wage by 5.2% will drive up both inflation and unemployment:
As inflation accelerates, the reality is that this increase in the minimum wage will not prevent a real wage cut this year for millions of Australians. And the hard truth is that it will both fuel further inflation and put upward pressure on the unemployment rate…
As I have written before on these pages, there is a trade-off between the minimum wage and unemployment…
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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