er cent, the largest in its recorded history. Further, research by The Australian Institute revealed that the main driver of inflation was company profits, rather than wages. Meanwhile, the Australian Council of Trade Unions (ACTU) has called for the Fair Work Commission to increase award and minimum wages by seven per cent – from $21.38 an hour to $22.88 – from 1 July 2023.  The Australian Financial Review has reported that the Labor Government would back an inflation-matching wage increase for the lowest-paid workers and a lower increase for staff on higher award rates.  With wages not keeping up with inflationary pressures for many, is there an obligation for retailers to offer staff a living wage – or earnings that allow employees to afford a ‘decent’ standard of living? An international brand that committed to offering staff a living wage was Burberry – one of 12,000 voluntary Living Wage employers in the UK – which committed to bringing forward increased pay rates for staff by about six months, taking effect in October 2022.  In 2023, the living wage in the UK rose by £1 to £10.90 ($19.55), above the national minimum wage of £9.50. In a recent statement, Burberry CEO Jonathan Akeroyd said that it was proud to implement the UK real Living Wage early. “[We] hope that this, coupled with the policies and wellbeing programs we already have in place, will help to alleviate some of the challenges our colleagues are facing,” Akeroyd said. Another company that recently promised wage increases is Fast Retailing, parent company to Uniqlo, which committed to a 40 per cent salary increase for staff in Japan in January this year. According to Reuters, it comes amid decades of deflation and cost cutting, and a heightened focus on workers pay. In Japan, real wages fell by 4.1 per cent in January 2023 compared to the year prior, and is now at its lowest point since 2014.  Making ends meet According to senior lecturer, discipline of work and organisational studies at the University of Sydney Business School, Dr Meraiah Foley, most retail workers in Australia are covered by relevant industry awards, which set the minimum wages for workers in that sector. She said that, in theory, these award rates should provide enough income for workers to support themselves, and cover crucial expenses like housing, food and other living costs. However, it’s debatable as to whether it’s a sufficient tool in lifting people out of poverty. Dr Foley added that minimum and modern award wages are reviewed each financial year by the Fair Work Commission – with the organisation increasing both rates to reflect the enormous inflationary pressures within the economy. However, with inflationary pressures, the FWC’s annual increases may no longer keep up with the rising cost of living. Foley told Inside Retail that retail workers who are seeking better conditions could consider joining a union that advocates on behalf of retail workers, and take part in enterprise bargaining agreements (EBAs). “Regardless of their size, all retail employers should be meeting these minimum conditions and complying with modern awards,” Dr Foley said. “Research has [also] shown that private sector enterprise agreements [who] negotiated with union involvement generally have higher wages than those negotiated without union involvement.” Retail and Fast Food Workers Union president Jessica Barnes said that retail and fast food workers are some of the lowest paid workers in the country. She explained that many staff are paid minimum wage, while others are stuck in terrible EBAs, that in some cases pay below minimum wage.  This despite Covid-19 reinforcing the fact that these workers are essential, and should be treated as such. Barnes pointed to RAFFWU’s EBA with Better Read than Dead in 2022 – which saw increases to hourly pay for employees, a restoration of Sunday penalty rates, 20 days paid domestic violence leave and 26 weeks paid parental leave – as evidence of the fact that staff can earn living wages if they are members of a fighting union. “With the dramatic increase of the cost of living, and continued interest rate rises, our lowest paid workers are facing an increasingly difficult task in making ends meet,” she said. “RAFFWU strongly advocates for living wages that can meet the modern cost of living, and fair working conditions for all workers in Retail and Fast Food.” The Australian Industry Group cautioned the Fair Work Commission against steep minimum wage rises, due to the risk that it might raise inflationary pressures and expectations.  Wages driving sustainable growth According to Gerard Dwyer, national secretary of the SDA, most retail staff work part time or casual, and therefore don’t receive a full time wage. He said the issue is not just the hourly rate, but the number of hours staff can earn each week. He told Inside Retail that retail workers make up about 10 per cent of the Australian workforce, and that such a significant proportion of the population not being paid appropriately would have dire effects on the Australian economy.  “The Federal minimum wage for workers not covered by an Award is currently $21.38 per hour or $812.60 per week. It is widely recognised that this needs to be lifted to provide a living wage,” Dwyer said “Continued real wage cuts will force Australians to cut back on even the most essential items, causing further damage to the economy – particularly retail. [Wage] growth in retail and in all sectors is essential for sustainable economic growth.” Regarding economic outcomes if real wages for retail staff were lifted, Dwyer pointed to a 1990s case study, which compared fast food jobs in New Jersey, with neighbouring state, Pennsylvania. New Jersey increased its minimum wage, while Pennsylvania kept the minimum wage at the same rate. Subsequently, there was a 13 per cent increase in fast food restaurant employment in New Jersey, compared to Pennsylvania. “Here in Australia, we can see the same outcomes. Like in New Jersey, minimum wage workers are often in service industries, [including] fast-food and retail employment or aged care and disability care, and our regional areas are being hit hardest,” he said. “Two thirds of Australian GDP is driven by consumption – good wages for ordinary working people are critical in driving sustainable economic growth.” Policy impact As for what can be achieved at a policy level, Dwyer said that policymakers can strengthen labour laws to assist working people, so they can share in productivity gains. He added that the 50 per cent Sunday penalty rate cut in 2017 by the Fair Work Commission did not lead to the creation of jobs as expected, according to research by the University of Wollongong. According to Dwyer, anaemic wage growth has been a feature of the Australian economy since 2012, and can be attributed to a government policy architecture that includes – but is not limited to – inaction on wage theft and underemployment, a sharp increase in the gig economy without sufficient regulation, support for a reduction in penalty rates and opposition to minimum wage increases. He argues that this has had a cumulative effect of placing downward pressure on wages. “Policymakers need to ensure that retail workers, and those in other sectors on similar rates of pay, receive wages they can live on and protect these workers from attacks on their earning capacity,” he said.