Good companies that engage in wage rise negotiations with their workers are being undercut in a "broken" system that Bill Shorten says needs fixing.

The Labor leader also says the minimum wage is too low, in part because it was introduced when energy prices were much lower and water was free.

Mr Shorten says the enterprise bargaining system needs overhauling to stop disadvantaging companies who try to do the right thing.

"You're bargaining with your workers, but you've got got new entrants into the industry who go along and just pay the award," Mr Shorten told an Australian Financial Review event in Sydney on Wednesday.

"You've done the right thing, you've done six or seven rounds of bargaining and the problem is you're now at a competitive disadvantage.

"Because employers can just opt out of the bargaining system and say to their employees 'cut your wages or we'll take you back to the award'."

Labor's national conference last year endorsed a version of industry-wide bargaining, which will allow workers in select industries to bargain for wages across companies.

That includes industries such as child care, where the workforce is predominantly female and low paid.

"There's nothing wrong with paying women in feminised industries better," Mr Shorten said on Wednesday.

But Labor has stopped short of matching the Australian Council of Trade Unions' push for widespread industry bargaining.

Mr Shorten also stopped short of promising to introduce a "living wage" to replace the minimum wage, but he said the latter needed to be higher.

"The minimum wage is nowhere near a living wage," he said.

The ACTU has pushed for a living wage pegged at 60 per cent of the median national wage, rather than a minimum set by the Fair Work Commission.

"The minium wage concept came in as a principle before mobile phones, before we charged for water. The internet hadn't been invented," he said.

The Australian Chamber of Commerce and Industry said Mr Shorten's position will hurt small businesses especially.

"Labor's position seems entirely focused on pushing up wages, without any regard for the capacity of businesses, particularly small businesses, to afford to pay," chief executive James Pearson said.

"Labor needs to clarify, urgently, exactly what it intends."