The 2.6 million Australians on minimum or award wages need wages to rise by seven per cent this year to stay afloat, unions say.

The Fair Work Commission sat in Sydney on Wednesday to hear first-hand from government, unions and industry groups for its annual wage review.

The people set to benefit from the commission's decision due in June were already struggling to pay for rent, groceries and energy prices, the union's peak body said.

"This pay increase is absolutely essential to make sure people keep their heads above water and keep up with the cost of living," ACTU secretary Sally McManus told reporters outside the commission.

Annual inflation was seven per cent in the March quarter, coming off a three-decade-high of 7.8 per cent in December.

While it appears to be declining, minimum wage workers needed and deserved a rise of seven per cent after suffering a decline in real wages in the past two years, Ms McManus said.

The minimum wage is $21.38 per hour or $812.60 per week, having risen 5.2 per cent last year.

A seven-per-cent increase would amount to $1.50 per hour or $56.88 per week.

"We do recognise that it's a volatile time ... (and) hard to predict exactly what will happen with CPI," Ms McManus said.

"Should CPI continue to fall ... (workers) will start to catch up, start to have some real wage increases which they absolutely need and deserve."

But retailers have warned the commission any "significant increase" would have a compounding effect on the viability and profitability of shop owners.

The jump in pay should not exceed 3.25 per cent, the National Retail Association said in a post-budget submission on Monday.

The nation's largest business network is of a similar view, suggesting a 3.5 per cent increase on top of the legislated 0.5 per cent increase in the superannuation guarantee.

That was "fair and reasonable in the current economic circumstances", the Australian Chamber of Commerce and Industry said.

"It is important the panel determines an increase to minimum and modern award wages that is fair and reasonable for both employees and employers and is responsible in terms of the potential to contribute to inflation and risks to the overall economy."

The federal government has recommended the real wages of the country's low-paid workers "do not go backwards".