Unions have called for Australia's lowest-paid workers to get a $43-a-week pay increase after Labor hinted at tweaking industrial relations laws to drive wages up.
The Australian Council of Trade Unions wants the Fair Work Commission to lift the minimum wage by six per cent rise to $762.20 a week, up from $719.20, in its annual review.
ACTU secretary Sally McManus said a 10.7 per cent increase over two years would lift people out of poverty.
"No full-time worker should live in poverty," she told ABC Radio National on Wednesday.
"If you work 38 hours a week you should earn a living wage, one you can survive on not one that pushes you into poverty."
Labor leader Bill Shorten is weighing up ways to encourage the commission to take more factors into account to ensure low-paid workers get a living wage, which is 60 per cent of the national median wage.
Ms McManus said Fair Work should be making minimum wage determinations based on the living wage.
"We absolutely believe the commission should be given the job of deciding what a living wage is in Australia," she said.
Employer groups have warned against compromising the independence of the industrial relations tribunal, while also arguing unsustainable pay increases could cost jobs.
Assistant Treasurer Stuart Robert said everyone wanted to see higher wages, but it needed to be done in a responsible way.
"Artificially increasing the minimum wage would have a detrimental effect right across, especially small business," he told Sky News on Wednesday.
But Labor frontbencher Ed Husic said Australia needed a functioning economy that worked for the majority of people rather than a few.
"There'll be a lot that are trying to shake a skeleton at people arguing that if you see a wage increase it will impact on joblessness, well give me a break," he told Sky.
The Australian Chamber of Commerce and Industry is against governments using legislation when the rate of any pay rises has been set by an independent body for more than a century.
But Ms McManus said the business lobby is out of touch with the realities facing lower-paid workers.
Australia's minimum wage is $18.93 an hour or $719.20 per 38 hour week before tax.
Business Council of Australia chief executive Jennifer Westacott said her organisation had consistently supported an independent mechanism to set the minimum wage.
"The way to lift wages and keep them higher is by lifting productivity," she said.
© AAP 2019