The ACTU has revised its minimum wage claim from 5 per cent to 5.5 per cent, to protect the low paid in the midst of an accelerating cost of living crisis.

This increase would lift the hourly rate in the minimum adult wage from $20.33 to $21.45, the weekly rate from $772.60 to $815.09 and the annual rate from $40,175.20 to $42,384.84.

When the ACTU submitted its initial claim on 31 March, the federal budget had predicted inflation would peak at 4.25 per cent in the middle of this year. By May, inflation was already at 5.1 per cent and the RBA is predicting it will reach 5.5 per cent by mid-year.

A pay rise of 5.5 per cent for the one in four workers who rely on the outcome of the minimum wage case aims to ensure that they do not go backwards in real terms, the ACTU said.

ACTU Secretary, Sally McManus, said the claim was designed to break the trend of the deep real wage cuts that she attributed to “Scott Morrison missing in action on wages”.

“A 5.5 per cent increase is what is now needed just to ensure people tread water; anything less has them drowning in bills,” she said.

“People have already cut back discretionary spending; they will have no choice but to cut it completely as for so many workers – cleaners, aged care and retail workers, there is nothing left after the rent, groceries and petrol.”