Summary
The Department’s examination of the current labour market conditions suggests that the options for changes to the minimum wage could have the following effects:
- Option 1 of $12.75 an hour will erode the real value of the minimum wage. It is estimated that there may be an increase in employment growth compared to the benchmark used. It is likely that there will be no impacts on national weekly wage earnings or inflation
- Option 2 of $13.00 an hour maintains the real value of the minimum wage (based on changes in consumer prices) and relativity with benefit payments. This option could directly affect up to 53,000 workers; it is likely that it would not constrain employment growth. It could increase annual economy-wide wages by $15 million and inflation by 0.01 percentage points
- Option 3 of $13.50 an hour will increase existing levels of fairness and income distribution and may increase or maintain protection and work incentives. This option could directly affect up to 108,100 workers. It may constrain employment growth by between 460 and 660 jobs. It could increase annual economy-wide wages by $76 million and inflation by 0.04 percentage points
- Option 4 of $15.00 an hour would increase the real value of the minimum wage and its relativity with other income benchmarks. It could strongly improve relative levels of fairness, protection, income distribution and work incentives. It could directly affect up to 274,900 workers and constrain employment growth by up to 5,890 jobs. It could increase annual economy-wide wages by $518 million and inflation by 0.26 percentage points.
