Each year the Fair Work Commission (FWC) sets the new minimum wage and also how much the award wages should rise. Although these are Australia’s lowest-paid workers, each year various business groups seek to blame them for inflation and any business difficulties.  Year after year business groups submit recommendations to the FWC arguing to limit the increase in wages to no more than inflation – and often even lower – because they say higher wage rises will cause inflation.

However, such fears are totally overblown.

Last week, our research on the minimum wage showed that over the past 35 years, increases in both award wages and the minimum wage have had no impact on inflation. We did this research in part to rebut these ongoing claims by business groups that increases in the minimum wage should not be above inflation for fear of causing a wage-price spiral.

That no wage-price spiral ever occurs is oddly never an impediment to business groups continuing to warn that it will happen should the FWC grant an increase in the minimum wage of more than inflation.

You can read more, here