Business SA has expressed concern with the decision by Fair Work Australia to significantly increase the minimum wage.
Business SA Chief Executive Officer, Peter Vaughan, said that it was disappointing that businesses would face another hit.
“This increase in minimum wages is likely to flow on into price increases and force businesses to review employment levels,” Mr Vaughan said.
“South Australia is a small business State and this ruling will add an enormous amount of pressure to those that can least afford it.”
The National Minimum Wage increases to $589.30 per week (or $15.51 per hour based on a 38 hour week), representing a 3.4 per cent increase or an increase of $19.40 per week.
“Recent economic data has confirmed that the local and national economy is not in a position to warrant this increase in labour costs,” Mr Vaughan said.
“The businesses that will primarily pay this increase are generally smaller businesses in areas including retail, hospitality and tourism.
“Retail trade data from previous months has highlighted the lows levels of business and consumer confidence across the State.
“With rising electricity and water prices, and increased costs in doing business, the increase in wages is another cost that businesses will simply not be able to absorb.
“This decision comes at a time when the impending carbon tax will increase costs for business, making them less competitive and putting jobs at risk.
“Businesses acknowledge the need to pay fair wages, however the local business community will struggle with this increase and labour costs will no doubt come under scrutiny.”