Unions have called for a $30 weekly pay rise for minimum wage workers, but a business group is calling the proposal reckless.
The Fair Work Commission (FWC) is hearing final submissions for its annual minimum wage deliberations in Melbourne on Tuesday.
ACTU President Ged Kearney has called for a $30-a-week minimum wage hike.
The proposal raises the wage from $15.96 per hour to $16.75 an hour to avoid the rise of an American style working poor, she said.
"We need now to stop the decline in the relative income of low paid workers (compared) with the average worker in Australia," she said.
Ms Kearney said the minimum wage was currently 43 per cent of the average wage.
"If we don't arrest this decline in the minimum wage right now we may see the advent of an American style working poor in Australia," she said.
Low unemployment and a strong economy means the rise would have a minimal impact, Ms Kearney said.
"Workers on the minimum wage, they keep our hospitals clean, look after our elderly, they protect our children, they keep us fed," she said.
But the Australian Chamber of Commerce and Industry (ACCI) chief executive Peter Andersen said the hike could jeopardise jobs and hurt small business.
He called for a weekly rise of $5.80.
"The ACTU claim is reckless," Mr Anderson said.
"There is no doubt that thousands of jobs will have their job security weakened. Many employers will see a big wage increase in this case as the straw that breaks the camel's back."
The federal government has reiterated its support for an "appropriate" increase in the minimum wage.
The FWC will also hold final minimum wage hearings in Sydney on Wednesday.
A decision expected at the beginning of June.
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