Australian wages have recorded the largest quarterly growth in the 26-year history of the Wage Price Index, but still remain below the level of inflation.
New data from the Australian Bureau of Statistics (ABS) showed the Wage Price Index (WPI) grew 1.3 per cent in the September quarter, the largest three-month jump since the WPI began.
On an annual basis, wages are tracking at 4 per cent growth, the highest recorded since March 2009.
Michelle Marquardt, ABS head of prices statistics, said the Fair Work Commission’s decision on the pay packets of aged care workers heavily influenced the data.
“A combination of factors led to widespread increases in average hourly wages this quarter,” Marquardt said.
“In the private sector, higher growth was mainly driven by the Fair Work Commission’s annual wage review decision, the application of the Aged Care Work Value case, labour market pressure, and CPI rises being factored into wage and salary review decisions.
“The public sector was affected by the removal of state wage caps and new enterprise agreements coming into effect following the finalisation of various bargaining rounds.”
Annual growth of wages is still tracking below inflation, currently sitting at an annual rate of 5.4 per cent.
Annual wages growth remained stronger in the private sector (4.2 per cent) compared to the public sector (3.5 per cent).
“Almost half (49 per cent) of all private sector jobs recorded a movement [in the September quarter], with the average increase being around 5.8 per cent,” observed Ms Marquardt.
“This compared to the public sector where 34 per cent of jobs recorded an average pay rise of 3.3 per cent.”
Annual wages growth overall was 4 per cent, which was the strongest since March 2009, but still fell short of the 5.4 per cent increase in consumer prices over the same period, meaning real wages (the purchasing power of what workers earned) fell again.
Although wages growth of 1.3 per cent in the September quarter edged above consumer price increases of 1.2 per cent over those three months, Indeed’s Asia-Pacific economist Callam Pickering said working Australians are still a long way behind.
“Adjusted for inflation, Australian wages are still down around 7 per cent from their peak and are hovering around their lowest level in 13 years,” he noted.
