A Halt in Australia’s Wage Growth
Since the start of 2016, Australia has seen the lowest wage growth in around twenty years. According to the ABS, between January and March this year wages only grew by 0.4%. This is the slowest growth rate experienced since 1997.
Given that inflation has been low recently, it shouldn’t affect families too much since the cost of food and other essential expenses won’t eat up an alarming amount of family income. In March 2015 to 2016, wages grew by 2.1% which inflation was at 1.3% for comparison.
One major factor in this halt to Australia’s wage growth is that unemployment is currently at extraordinarily high levels, up at 6% in January following around 8,000 jobs lost. There is currently a record number of underemployment in our economy as well.
For private sector workers, wages grew 1.9% over the year from March 2015 to 2016, 0.4% for the last quarter. Western Australia experienced the slowest growth over the same time period (1.3%), followed by Queensland (1.7%) and the Australian Capital Territory (1.8%).
Industry specifically, over the last year, administrative workers received no pay rise at all, with the lowest wage growth being 1.3% for workers involved in real estate services. In the same time period, public sector workers experienced a wage growth of 2.5%, 0.5% over the last quarter. Financial, insurance, education and health workers all experienced the highest reported levels of wage growth over the year with wages growing by 2.6%.
The main factors contributing to this weak growth in Australia’s economy is rising automation in the workplace, decreased unionism and an increase in the number of low-skilled labourers.