The Minimum Wage Panel has decided there will be a 2.6 per cent increase on the national minimum wage.

The increases will take effect from the first full pay period after July 1, 2013 and will increase the full time Retail Employee Level 1 rate to $683.40 per week or $17.98 per hour.

However, this decision has left many retailers feeling uneasy. Australian Retailers Association executive director Russell Zimmerman said it will just add to the existing stress retailers are already facing in the current economic climate.

“The minimum wage increase, together with a superannuation levy rise to 9.25 per cent, continually weak trade figures and penalty rate rises under Fair Work Commission awards, will only cause further damage to retailers who are struggling to keep their heads above water as it is,” he said.

This was pointed out by the Australian National Retailers Association (ANRA) and the National Retail Association (NRA) when they made a submission to the Panel for the retail sector to be exempt from the national increase and proposed for a flat dollar increase instead.

But the Minimum Wage Panel in its Annual Wage Review 2012-13 pointed out the retail industry, an award-reliant sector, has improved both sales and profitability, while wages growth and employment in the sector has been below average for all industries.

NRA CEO Trevor Evans said the increase would be applied to many industry awards, including those covering the retail and fast food sectors.

“While people outside the business environment will no doubt argue 2.6 per cent is not a major cost impost, it is in reality the latest in a long line of extra costs burdens, including higher energy prices, the carbon tax, award modernisation and spiralling insurance premiums,” he said.

“Furthermore, this will not be the only increase in wages this year, with other increases occurring due to the transition to the Modern Awards and the government increasing the superannuation levy.

“The fact is that this rise, in conjunction with other wage and cost increases, will cause significant pain for many struggling businesses in the retail sector.”