This paper examines the correlation between minimum wage increases and inflation going back to 1990 and finds no consistent link between minimum wage increases and inflation. It reveals a fair and appropriate increase to the minimum wage and accompanying increases to award rates would not have a significant effect on inflation.

Key findings

• Despite increases in the minimum wage over the past two years above inflation, inflation fell by a combined 4.5 percentage points.
• There has been no significant correlation between rises in the minimum wage and inflation since 1990.
• Raising wages by 5.8% to 9.2% in 2025 would offset recent inflation and restore real wages for award-covered workers to the pre-pandemic trend.
• Even if fully passed on by employers, higher award wages would have no significant impact on economy-wide prices.