The Australian Retailers Association (ARA) and the Jewellers Association of Australia (JAA) have shared concerns about the Fair Work Commission awarding a $15.80 a week increase in the national minimum wage.
From 1 July, the pay rate for retail assistants will increase to $19.44 per hour or $738.80 per week – an extra $17.30 per week.
ARA executive director Russell Zimmerman said the ARA advocated for a “realistic” and “manageable” increase of no more than $7.90 per week for the retail sector.
Zimmerman called the rise “unmanageable” for retailers nationally, including jewellers, and stated he feared the decision would mean many small and medium business owners would struggle to pay existing staff and take on new employees.
“I think [jewellery retailers] are adversely affected,” he added. “I think jewellers are going to be like every other retailer that’s feeling the pinch at the moment, they are going to look at their staffing levels and wherever they can – and they may not be able to in some – but wherever they can they are going to look at trying to reduce their labour costs.
“What I foresee hainstancesppening is retailers, particularly the mum and dad operators, will end up doing more and more hours themselves and less and less employees will be employed and that’s going to be a bad thing for the unemployment rate.”
Zimmerman explained that the minimum wage increase, coupled with weak trade figures and penalty rates, would only cause further damage to retailers “struggling to keep their heads above water”. He cited one unnamed retailer who had not allowed for such a high increase within their budget.
Industry concerns
JAA executive director Amanda Hunter said while the association did not believe the increase would be unmanageable for jewellers it shared the ARA’s concerns.
“Of course many retailers have seen declining profits and high costs and are finding it harder in the current economic climate and this is just another squeeze on their bottom line,” Hunter explained.
“Jewellers are vulnerable generally if there is low consumer spend, given they are in a luxury goods market and wages are a key component in any industry where customers want to build trust and expect exceptional customer service and to compete with the changing market where there are online and overseas competitors.”
Commenting further on the potential impact of the pay rise, Hunter stated, “The risk is that businesses may consider cutting hours of staff and that can then in turn affect service offered; however, every business is different in their approach and how they might cope with these increased costs.”
Hunter indicated that perhaps the more pertinent staffing issue was encouraging people to view retailing as a long-term occupation.
“We have heard that a key issue in this industry is more the staff turnover and the costs and disruption that causes, given many do not see retail as a long-term career,” she said. “Many retailers are happy to pay good loyal staff if they then are contributing to better bottom line results.”
Hunter added that the JAA had not received any feedback from jewellery retailers since the announcement was made.
The Fair Work Commission conducts an annual national wage review, implementing a minimum wage adjustment each year that generally takes effect 1 July.