As minimum wage earners prepare for a 5.2 per cent lift to their pay packets, small businesses have warned it's never been this difficult to trade.
The Fair Work Commission handed down its decision to raise the minimum wage by 5.2 per cent, or $40 a week, earlier this month.
I think that our staff definitely deserve it. We don't begrudge them getting that pay increase, but it's certainly a hit at an inopportune time, Cathy Maher said.
Cathy Maher runs Lollipops Playland in Melbourne's Noble Park. (A Current Affair)
Maher runs Lollipops Playland in Melbourne's Noble Park.
The play centre employs 25 staff, many of whom are currently on minimum award wages.
We've had the food increases for our cafe, wage increases, we've had electricity, gas, so many different increases, Maher said.
According to Maher, the rising costs could soon be passed on to the consumer.
We don't want to have to pass on those expenses to our customers. They've been really loyal to us and they've tried to help us through everything, she said.
But it's gotten to the point where some of those increases that have been going on over the last three years may need to now trickle through to them.
The pay rise is expected to affect 2.67 million workers. (A Current Affair)
For the owners of Hawthorn's El Churro Cafe, it's a similar story.
If it was just one cost, we can manage that. But when it's the energy costs, when it's iceberg lettuce costs, when it's everything else, fuel costs, that's what really makes it really hard to survive, Sam Aldemir said.
He and his wife Dee, have owned the cafe for 10 years.
We welcome the wage rise and again, in isolation, that won't really be an issue. But adding the other cost pressures, it just cascades, Aldemir said.
Dee and Sam Aldemir Hawthorn's El Churro Cafe. (A Current Affair)
Aldemir toldA Current Affairthat businesses along Hawthorn's Glenferrie Road had no other choice but to close their doors recently.
There are two or three businesses in the last couple of weeks at least that have gone broke, and we suspect a few more, Aldemir said.
You've got to be an eternal optimist to own a small business, with all the challenges that we've had.
What about the workers?
For workers on minimum wage and minimum award wage, the rise to their pay come July 1 will help them to battle the increasing cost of living.
That's going to work out to about $36 more for me a week. It's not huge, but when you're living week to week, that's a big difference, Jordan Hutchins said.
Hutchins is a 20-year-old student who works in fast food.
That's gonna go straight towards my bills and my groceries. It's not going to be going into a savings account I don't think, not anytime soon anyway, Hutchins said.
The Secretary for the Australian Council of Trade Unions, Sally McManus, is encouraging small businesses to pass on wage increases to their workers, whether they are on minimum wage or not.
For those small businesses that are paying people still right on the award minimums, I just say this: if your customers have less money to spend, that's less money they're going to be spending in your business, McManus said.
I don't accept at all that big business can't pay these increases. They absolutely can, they just have to accept that they have to take a very small cut in their profit margins, which are huge at the moment.
The Secretary for the Australian Council of Trade Unions, Sally McManus. (A Current Affair)
McManus said the Fair Work Commission's decision is the only pay rise some members of Australia's workforce will get.
The big group of people who are going to get this pay rise, who will see no other pay rise are Aged Care Workers, Childcare Workers, Disability and Community Support Workers. This is the only pay rise they will get and they deserve every single cent, McManus said.
Which businesses won't be impacted by the minimum wage rise?
The ACTU toldA Current Affairthe rise in the minimum wage will not impact businesses which are already paying above the minimum wage or minimum award wage.
There's a lot of small businesses that are already paying way more than the minimum and that's because we've got a skill shortage at the moment. They're having to do that to keep people. This pay increase won't apply to them. They don't have to pay it, McManus said.
Vincenzo Tomaino spoke to A Current Affair reporter Sam Cucchiara. (A Current Affair)
That's one piece of good news for Vincenzo Tomaino, who is currently paying staff working at his Melbourne restaurant Sud well above the award minimum wage.
However, Tomaino toldA Current Affairthat even offers of high pay aren't enough to attract and keep staff in Melbourne's hospitality industry.
I'm offering $45 an hour to anybody, to do anything. To walk a straight line and carry two plates, to wash dishes, maybe and people say they'll think about it and they'll get back to me, and no one gets back to me, Tomaino said.
With the rising cost of meat, fruit and vegetables, along with rising utility bills and rent, Tomaino said he's watched restaurant after restaurant in the area close.
I've been around for a long time. It's never been this difficult.
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