The Fair Work Commission is raising Australia's national minimum wage by 3.5 percent beginning on 1 July. 

That's an increase of $24.30 for a 38-hour week, $719.20.  This affects about 2.3 million Australian workers, which is about 20 percent of the workforce.

Business groups proposed a wage hike of only about $12 per week, claiming that that higher pay awards would kill jobs.  And the number set by the Fair work Commission is about half of the $50 per week hike sought by the Australian Council of Trade Unions.

Some unions such as the SDA, which represents retail and fast food workers, said the increase was "the shot in the arm the Australian economy desperately needs", and the ACTU says it's a "step in the right direction".  But ACTU secretary Sally McManus also says it's time to change the way the minimum wage is set.

"People who have been forced into poverty by the inadequacy of this wage should not have to wait every year to see if they will be saved by the Fair Work Commission," she said, "The minimum wage should be set to keep pace with wages."

The ACTU is suggesting the minimum wage be set at 60 per cent of the median wage.

And The Greens say even the higher minimum wage will not raise working people out of poverty.

"Until we enshrine in law a minimum wage above poverty level, inequality will continue to grow in Australia," said Greens workplace relations spokesman Adam Bandt.