Prime Minister Scott Morrison has ramped up his attack on Labor, accusing Bill Shorten of forcing businesses to sack people to give others a pay rise.
While the union made its case for a 10.7 per cent rise to the minimum wage over two years, Labor is yet to detail its plan to lift low-income wages.
Mr Morrison said the Labor leader needed to be clear about how many jobs the plan would cost and how many businesses would shut down.
"He's saying to coffee shop owners and small businesses around the country: 'sack someone'. That's his policy - that people should be sacked," the prime minister told reporters in Melbourne.
Prime Minister Scott Morrison says a living wage would force businesses to sack workers. Source: AAP
Labor has framed the May election as a "referendum on wages" and the opposition leader has flagged legislative changes to drive up pay for low-income workers.
But Labor has stopped short of adopting the union's measure of a living wage which is tied to 60 per cent of the national median salary.
In its submission to the Fair Work Commission's annual review of the minimum wage, the Australian Council of Trade Unions calls for a six per cent rise to $762.20 a week, up for $719.20.
That would rise to a 10.7 per cent increase over two years.
"No full-time worker should live in poverty," ACTU secretary Sally McManus told ABC Radio National on Wednesday.
Business groups alarmed by 'living wage'
Mr Shorten has endorsed the concept of a living wage, but hasn't settled on an exact amount.
Employer groups have warned against compromising the independence of the industrial relations tribunal, while also arguing unsustainable pay increases could cost jobs.
Opposition leader Bill Shorten is considering tweaking Australia's industrial laws to lift wages for low-income earners. Source: AAP
Assistant Treasurer Stuart Robert said everyone wanted to see higher wages, but it needed to be done in a responsible way.
But Labor frontbencher Ed Husic said Australia needed a functioning economy that worked for the majority of people rather than a few.
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.
The Business Council of Australia and Australian Industry Group have also warned against unsustainable wage rises.
Additional reporting by AAP