Wages increased 2.2 per cent in the year to September with the private sector driving the majority of the rise in pay despite lockdowns in major capital cities.
Australian Bureau of Statistics data released on Wednesday morning shows private sector wages increased 2.4 per cent over the year, with the public sector trailing behind at 1.7 per cent. The overall increase was in line with market expectations and measured wage rises during coronavirus-induced lockdowns across NSW, Victoria and the ACT.
The private sector drove the majority of the rise in pay despite lockdowns in major capital cities.Credit:Louie Douvis
Over the September quarter, wages increased 0.6 per cent in the private sector and 0.5 per cent in the public sector. Public sector wage freezes introduced during the pandemic ended over the last three months.
Tasmania and the ACT both recorded a 1 per cent increase over the quarter, the highest across the country. Tasmania is now at its highest annual rate of growth in eight years.
Wage growth in NSW was up 2.2 per cent for the private sector over the year and 1.6 per cent in the public service. In Victoria this was 2.7 per cent and 2.1 per cent respectively.
ABS head of price statistics Michelle Marquardt said wages growth had returned to normal levels following disruptions due to the pandemic.
“Wage and salary reviews around the end of the financial year, scheduled enterprise agreements and annual award rises all contributed to growth,” Ms Marquardt said. “Pockets of wage pressure continued to build for skilled construction-related, technical and business services roles, leading to larger ad hoc rises as businesses looked to retain experienced staff and attract new staff.”
The Reserve Bank wants to see higher inflation before hiking interest rates, with governor Philip Lowe yesterday confirming the central bank considers it “plausible” these conditions will not be met until 2024. However, major banks and a growing group of economists are tipping rates to rise as early as next year. Dr Lowe said this would require a rapid increase in wages beyond what he is predicting.
The ABS notes the September and December quarter wage growth would be helped more than usual by the Fair Work Commission Annual Wage review, which put award rises in different time periods. Usually, this happens over three quarters but the majority of pay increases this year are scheduled for the second half of the year.
The biggest wage increases were received by professional, scientific and technical services staff, with a 1.3 per cent quarterly rise or 3.4 per cent over the year. This is the highest for this sector since 2012.
Mining had the lowest increase of 0.4 per cent over the quarter, while electricity, gas, water and waste services had the slowest annual wage rise on record at 1.2 per cent.
Skills shortages could contribute to wage rises, and the October National Skills Commissions Internet Vacancy Index released on Wednesday showed a 7.8 per cent increase in online advertisements for jobs to 250,900. This measure is now at a 13-year-high.
There was an 18.6 per cent increase in advertisements for labourers and a 24.3 per cent increase for community and personal service workers including hospitality staff. All skill levels recorded growth with the strongest in the lowest skill levels.
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