ACTU’s claim is more than double last year’s $22-a-week increase to minimum wage

Unions have called for a uniform 7.2% increase to the minimum and award wages, which would give a $50-a-week pay rise to Australia’s lowest-paid workers.

The Australian Council of Trade Unions will ask for the rise in a submission to the Fair Work Commission’s annual minimum wage case, which will apply from July.

The claim is highly ambitious – more than double last year’s $22-a-week increase – and is part of unions’ campaign to make the minimum wage a “living wage” that keeps up with the cost of living.

The Australian Industry Group has called for a “modest” increase of 1.8%, or $12.50 a week for those on the minimum wage and $14.60 for the lowest award rates.

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Labor has signalled it would change the minimum wage setting process to combat the widespread stagnation of wages, despite continued economic growth and improved labour productivity.

On Wednesday Malcolm Turnbull rebuked Labor for backing union pay demands, labelling Bill Shorten a “craven populist” and warning that dramatic rises would cause unemployment.

The ACTU’s proposed 7.2% increase across the board would bring the minimum wage to $744.90 a week and would lift award wages by between $55 and $85 a week. Some 2.3m workers are paid minimum wage or award rates, which are adjusted by the FWC in the same decision.

In its 2017 minimum wage decision, the FWC said “modest and regular wage increases” did not increase unemployment. The commission noted that research indicated it may have been “overly cautious” about the effect of wages growth on unemployment in previous years, suggesting that last year’s 3.3% rise could signal a new willingness to grant above-inflation pay rises.

The ACTU secretary, Sally McManus, said there “has never been a better time for a big pay rise for Australians” due to record low wages growth and penalty rate cuts.

“People should not work full-time and struggle to pay for the basics of life,” she said. “We need to restore a living wage. This will help put us on the path to a living wage where the minimum is 60% of the median wage in the long term.”

The minimum wage is currently 55.1% of the median wage.

The chief executive of the Australian Industry Group, Innes Willox, said the FWC “needs to take a cautious approach when determining the quantum of this year’s minimum wage increase”.

Willox labelled last year’s 3.3% rise “exceptionally high and out of step with economic factors”.

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“It is essential that the increase awarded by the [FWC] panel this year is much more modest,” he said. “An excessive increase would reduce the job security of low-paid workers and reduce employment opportunities for the unemployed and underemployed.”

On Sunday the ACTU launched its largest nationwide advertising campaign since the 2007 Your Rights at Work campaign to abolish WorkChoices.

The new Change the Rules campaign argues that limits on collective bargaining have contributed to four years of persistent low wage growth and the average household having less disposable income in real terms now than in 2013.

McManus will appear at the National Press Club on 21 March to outline the key demands of the campaign, which it is understood will include a shift away from enterprise bargaining to industry-level bargaining and even arbitrated wage outcomes in some circumstances.

Labor is still formulating its industrial relations policy but in addition to minimum wage changes is considering ways to encourage industry-level bargaining for low-paid workers.

The former ACTU assistant secretary Tim Lyons has said unions should be prepared to consider unlawful industrial action to win pay rises, not simply rely on the political system to change bargaining rules in their favour.