Annual wage growth surges to 14-year high of 4%
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A 4.0 per cent surge in wages for the year to September – the fastest rate for 14 years – and a record 1.3 per cent spurt for the quarter was the welcome result of government policy, the Treasurer said yesterday.
The ABS said the quarterly growth figure was the highest in the 26-year history of the Wage Price Index and head of prices statistics Michelle Marquardt said the result came down to a combination of factors.
“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,” she said.
“Many public sector jobs were affected by the ending of state wage caps and the resolution of wage negotiations. This resulted in initial or backdated increases being paid for jobs covered by the newly approved enterprise agreements.”
Treasurer Jim Chalmers said Australians deserved higher wages “and that’s what we’re delivering”.
“We believe that solid, sustainable wages growth is part of the solution to the cost‑of‑living challenges Australians face, not part of the problem,” he said.
“Stronger wages growth is a result of the Albanese Labor government’s policies to lift wages for workers including our support for record increases to the minimum wage, a 5.75 per cent pay rise for workers on awards, the highest ever pay rise for aged care workers, our big investments in education and training, and significant investments in new industries to create secure, well‑paid jobs.”
“We seek wages growth that is strong and sustainable, and an economy that is more productive, competitive and inclusive.”
The public sector recorded a 0.9 per cent wage increase for the quarter and annual growth of 3.5 per cent – quicker than at any time since June 2011.
But wage growth in the private sector was racier still, with a 1.4 per cent quarterly increase and annual rate of 4.2 per cent, a mark unsurpassed since December 2008.
Ms Marquardt said two elements that drove the results were the proportion of jobs that had a rise and the size of the increases.
“In original terms, across all public and private sector jobs that had a wage movement in the September quarter, the average change was a 5.4 per cent increase, up from 4.0 per cent in September quarter 2022,” she said.
“The growth was mostly driven by increases to wages in the private sector. Almost half (49 per cent) of all private sector jobs recorded a movement with the average increase being around 5.8 per cent.
“This compared to the public sector where 34 per cent of jobs recorded an average pay rise of 3.3 per cent.”
Accommodation and food services set the pace at 3.2 per cent for the quarter and 5.5 per cent for the year, the ABS said, with some hospitality jobs getting two award increases over the past 12 months.
“Healthcare and social assistance also saw significant wage growth of 3.1 per cent for the quarter and 4.9 per cent annually. Many jobs in this industry have wages set by awards or enterprise agreements with scheduled increases linked to the Fair Work Commission’s annual wage review 2022-23 decision and higher wage provisions for aged care workers.”
Trailing the pack was the mining industry, with quarterly growth of 0.8 per cent, and finance and insurance, with an annual growth of 3.1 per cent.
Philip King
16 November 2023
accountantsdaily.com.au