The Australian Retailers Association (ARA) is calling for the Fair Work Commission’s (FWC) Minimum Wage Panel to increase national minimum and award wages by no more than $8.50 or 1.3 per cent in the 2014 Minimum Wage Review.

Russell Zimmerman, executive director of the ARA, said the 1.3 per cent increase allows for expected inflation over the year to the September quarter 2014, while clawing back the over compensation for inflation provided in the past two minimum wage decisions.

“The ARA’s position preserves the value of the minimum wage over the last three years, and our submission addresses the key considerations of FWC when performing its wage setting function – which is to promote the economic prosperity of the people of Australia having regard to the capacity for the unemployed to obtain employment, as well as providing a safety net for the low paid and providing minimum wages for junior employees.

“The ARA’s submission has outlined the difficult trading environment existing for the retail sector. With most small to medium retailers being reliant on a minimum wage workforce, any move to increase wages within the sector during this time of low consumer confidence and low to negative growth will only further job losses currently underway within the sector,” Zimmerman said.

He added that the retail industry makes a significant contribution to the overall state of the national economy and employs more people, including more juniors, in Australia than any other private sector industry.

“The retail industry is more reliant on pay scales than any other industry, and also suffers a higher disproportionate effect in minimum wage increases than other industries due to deregulated trading hours and penalties across all retail awards.

“It is no secret that the retail sector is on a low to negative growth period during this time of low consumer confidence and low business confidence in the services sector. The FWC should consider any increase on an award by award basis and provide an interim decision or statement prior to handing down a final decision.

“The ARA strongly recommends the FWC hand down a minimum wage increase that is realistic and reasonable and one that considers weak economic trading conditions, current and imminent wage bill increases for industries undergoing structural adjustment and underemployment levels.

“What also must be taken into account is that the retail sector could hold potential wages growth if costs through wages are kept under control,” Zimmerman said.