The ACTU says the increase will help lower paid workers keep up with price pressures.

With inflation running at 4.2 percent, the Annual Wage Review decision by the Fair Work Commission (FWC) will broadly keep up with the cost-of-living and will provide some financial relief for 3 million working Australians, the ACTU said.

The uplift in pay for minimum wage and award-reliant workers will help working Australians deal with the very worst of the inflation effects caused by what the FWC termed the “wild card of the Middle East conflict”.

Additionally, the FWC increased the wages of around 100,000 workers on the lowest modern award rates by 6 per cent. This lifts the lowest rate of pay from $24.95 per hour to $26.44, or a $56 a week increase for a full-time worker to $1,004 from 1 July.

Lower-paid workers are concentrated in retail, accommodation and food services, community, care, arts, administration, recreation and the health care sectors. They are predominantly women, and on part time or casual work arrangements.

ACTU Secretary Sally McManus welcomed the FWC decision.

“The lowest paid need to spend almost all of what they earn to survive, and this wage increase will be vital to them while generating income for local businesses that also need a boost.”