Minimum wage earners should get an extra $80 per week to meet the rising cost of living, the Australian Council of Trade Unions says.
A "living wage" would ensure working people were able to afford rent, a healthy diet, education, electricity and other "basic" costs and keep millions of Australians out of poverty, ACTU secretary Sally McManus said on Thursday.
The living wage should be measured as 60 per cent of the median wage as recognised by the global OECD, she said.
"By tying the living wage to the median wage you make sure everyone rises," Ms McManus said.
Doing this would mean the living wage works out to being $80 more per week than the current minimum wage in Australia.
"Wages aren't growing but cost of living is," she said.
The minimum wage in Australia is already the third highest in the world, the Australian Chamber of Commerce and Industry says.
"If wages get ahead of what small businesses can afford to pay it makes it really hard to create and maintain jobs, particularly for young people looking to enter the labour market," workplace relations director Scott Barklamb said.
"We need businesses and productivity to be growing in order for wages to rise.
"Lower wage positions are often a stepping stone to higher-paid jobs."
The minimum wage decision in 2017 for the Fair Work Act included an acknowledgement that the new rate would still leave many full-time workers in poverty.
Ms McManus says changes the union seeks will not be delivered under the current Fair Work system.
"We would like to see increases up front and then a smaller tail off over a period of time," she said.
