Fair Work Australia (FWA) awarded on Friday a $17.10 per week increase in pay to the country's minimum wage earners. The award, though, is less than the $26 weekly raise that unions sought.

With the hike, the new minimum wage would go up to $606.40 a week from the current $589.30. Expected to benefit from the award are 1.4 million Australian workers. The wage increase, which takes effect July 1, is the result of FWA's 2012 Annual Wage Review.

FWA President Iain Ross said despite the increase being lower than expected by workers, it would help them cope with rising prices. However, he said that FWA would no longer provide additional assistance to workers for price hikes due to the carbon tax since transfer payments and tax cuts addressed those issues.

"The uncertainty and the diversity of experience in the local economy have been significant factors in our determination of the level of increase in minimum wages," Courier Mail quoted Mr Ross.

While the Australian Confederation of Trade Unions (ACTU) batted for a $26 weekly upward adjustment, the Australian Chamber of Commerce and Industry (ACTU) favoured a lower $9.40 wage hike because Aussie employers could not afford the $2.8 billion which a higher salary increase would cost them.

In 2011, ACTU asked for a $28 weekly wage increase but FWA approved a $19.40 hike.

Prime Minister Julia Gillard welcomed the FWA decision since it would complement the other measures put in place by the federal government to help Australia's minimum wage earners cope with the spiraling prices.

Mr Ross admitted that in the past 10 years, average earnings rose faster than individual rates of pay.

"As a consequence, those reliant on award rates of pay have fallen behind the average earnings of workers and, in this sense, have not retained their relative standard of pay."

The Victorian Employers Chamber of Commerce and Industry (VECCI) criticized the FWA decision.

"We are disappointed Fair Work Australia's Minimum Wage panel has not considered deferring whole or part of the increase to struggling sectors of the economy such as retail, tourism, restaurants and catering, hospitality, manufacturing and housing construction," VECCI Workplace Relations Director Richard Clancy told The Herald Sun.

He insisted that the minimum wage must not be a hindrance to entry into the labour market and not be a contributor to job losses.

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