This is a good decision.
The Fair Work Commission has awarded an increase of 3.5% to up 2.6 million workers on minimum award rates to allow for low-paid workers to catch up on real wage cuts suffered during the pandemic.
The increase will lift the national minimum wage from $24.10 an hour, or $915.90 a week, to $24.94 an hour or about $948 a week.
The decision, which flows onto higher minimum rates in 120 awards covering the entire economy, will come into effect on July 1.
If we want to restore productivity, a good place to start is keeping wages as strong as possible.
Alas, this will not be strong given the nature of the permanent supply shock embedded in the immigration-led, labour market expansion economic model.
But stronger is still better to promote innovation and automation by employers who have for a very long time underperformed in terms of capital productivity.
Money has a cost, and so investing it needs to be done more efficiently if you are going to lift multi-factor productivity.
One very good incentive is to raise wage costs.
