Retail and fast food workers have lost hundreds of dollars in pay after the annual minimum wage increase was delayed, despite retailers reporting bumper sales in the pandemic.

Some economists and unions say businesses – which argued for a wage freeze amid job market concerns – should agree to a larger minimum wage rise next financial year to make up for the shortfall.

But the business sector has fired back, suggesting any future movements need to factor in the plight of struggling small businesses.

From Monday, the pay of retail, fast food and warehouse staff on award minimum wages will rise by 37.3 cents an hour to $21.78.

For a full-time worker, that equates to a $14.20 bump in weekly pay.

It follows a seven-month pause after the Fair Work Commission (FWC) staggered the rollout of wage increases for more than 2.2 million workers on the minimum wage (or whose pay is tied to those decisions).

Healthcare workers, teachers, childcare workers and social assistance staff received the boost on July 1 last year, while manufacturing and construction workers joined them on September 1.

But many frontline employees who worked through coronavirus restrictions were left in the lurch.

Employees lost $426 each due to the delay

Gerard Dwyer, national secretary of retail union Shop, Distributive and Allied Employees Association, said February marked the end of “a dark [seven-month] chapter” for hundreds of thousands of workers who served on the pandemic frontline.

Mr Dwyer said low-paid workers lost up to $426 because of the delay, despite providing essential goods when COVID-19 spread through the community.

“To many in the community this may seem like a small amount, but for lower-paid workers living from week to week, it can make a vital difference in making ends meet,” Mr Dwyer told The New Daily. 

“Many served on the frontline, making sure the rest of the community could put food on the table as well as the other essentials of life.

“[But] in real terms, their living standards were cut.”

Retail sales rebounded in November as crowds flocked to online and in-store Black Friday sales. Photo: Getty

The SDA successfully lobbied major supermarket chains and subsidiaries to pass on wage increases to workers in August last year, while other retailers made their own initiatives.

JB Hi-Fi, Bunnings, Costco, Woolworths, Coles, Big W and Dan Murphy’s were among the group of retailers who awarded their full-time staff a $1000 cash bonus during the pandemic (pro-rated for part-time and casual employees).

The FWC said the delay in the minimum wage boost for some of the hardest-hit sectors was heavily influenced by the risk of higher unemployment, as businesses could struggle to cover the costs during the recession.

However, FWC president Justice Iain Ross acknowledged at the time that it meant low-income households faced a heightened risk of poverty and would be “less able to meet their needs” as inflation outstripped wages growth.

Retailers and FWC ‘undershot’ pandemic expectations

Employer association Ai Group called for a wage freeze for the first time in 30 years in last year’s round of negotiations.

Ai Group’s head of national workplace relations policy, Steve Smith, told The New Daily any minimum wage rise needs to factor in struggling smaller businesses.

“It would’ve been a lot less risky to have a wage freeze because businesses are still in distress and the key focus at the moment should be on doing everything we can to boost employment,” Mr Smith said.

“And some of the bigger retailers have enterprise agreements, which means this new wage increase doesn’t affect them anyway.”

According to ABS figures, the unemployment rate reached a peak of 7.5 per cent in July and fell to 6.6 per cent in December.

Meanwhile, retail wages growth fell to 0.1 per cent in the September quarter, while accommodation and food wages grew just 0.2 per cent.

Retail workers felt additional pain from the final tranche of penalty rate cuts that docked 15 per cent off Sunday penalty rates from July last year.

Despite numerous penalty rate cuts over the past three years, Labor says it hasn’t translated into jobs growth. Photo: Getty

University of Queensland economics professor John Quiggin said the risk of a higher minimum wage triggering further job losses was always minimal.

He told The New Daily the pandemic showcased “the importance of frontline workers” and the need to “reward them better”.

“A greater risk was that the delayed increase would slow the recovery in consumer demand [and], in delaying a minimum wage increase, the FWC displayed the wrong kind of caution,” Professor Quiggin said.

Professor Quiggin said businesses should “learn from undershooting” in the pandemic year and be more generous when minimum wage negotiations recommence.

ACTU president Michele O’Neil – who argued for a rise of $30 a week – told The New Daily providing substantial wage rises to low-paid workers during a “once-in-a-generation economic crisis” was integral to stimulating the economic recovery.

“The more money that’s in the pockets of working Australians, the more money they have to spend and stimulate our economy,” she said.