No one is happy with the umpire's decision, not business about forking out $16 more a week to minimum wage earners nor workers who are getting a lower pay rise than last year.
The Fair Work Commission has given 1.86 million workers who are reliant upon minimum rates of pay a 2.5 per cent wage increase, down from last year's three per cent.
Unions and business groups alike were disappointed, although Australian Retailers Association executive director Russell Zimmerman labelled it a reasonable compromise before adding that it was unmanageable and he was concerned about industry jobs.
FWC president Justice Iain Ross said the panel had particular regard to the lower growth in consumer prices and aggregate wages growth over the past year as they had a direct bearing on relative living standards and the needs of the low paid.
"The lower inflation and aggregate wages growth has favoured a more modest increase in minimum wages," he said on Tuesday.
Justice Ross also said uncertainty about the timing of a stronger contribution to economic growth from non-mining investment provided a reason for some caution.
The Australian Chamber of Commerce and Industry, which wanted an increase limited to $5.70 a week, said the decision will hurt small business and job seekers in a struggling post-mining boom economy.
"In a stagnant economy you can't afford increases of this magnitude at the bottom end," ACCI director of employment, education and training Jenny Lambert said.
Ms Lambert said the federal budget had provided a bit of a fillip for small business which may be cancelled out by the hurt caused by the wage rise.
The ACTU said despite the lift in the weekly minimum wage to $656.90, it will be just 43.3 per cent of average weekly ordinary time earnings, the lowest proportion on record.
"We are extremely concerned that every year that gap is getting wider and wider and we are heading down the path of the US where we could have an entrenched class of working poor in this nation," ACTU secretary Dave Oliver said.
The ACTU wanted a $27 a week increase and Mr Oliver said the $16 rise did not address the household stress being experienced by low income earners.
Melbourne cleaner Gemal Babiker, 61, said the $16 would do nothing for him.
"Really it doesn't make any difference. I came here dreaming about five per cent. I get 2.5 per cent. Last year we got three per cent," he told reporters.
"We're going down instead of going up."
