AVERAGE INCREASES in wages over the last 12 months have been higher in Australia than in most other western countries, and key to future wage increases are the Government’s proposed industrial relations changes, according to John Buchanan, director of The University of Sydney’s acirrt.
AVERAGE INCREASES in wages over the last 12 months have been higher in Australia than in most other western countries, and key to future wage increases are the Government’s proposed industrial relations changes, according to John Buchanan, director of The University of Sydney’s acirrt.
Currently, about 20 per cent of the Australian workforce is totally dependent on awards and another 20 per cent relies on awards and some over award payments.
A further 40 per cent are on collective agreements and around 20 per cent are on individual contracts. Of the latter, only 2.4 percent of all workers have registered such contracts.
Speaking at a recent acirrt conference on skill shortages and wage breakouts, Buchanan said that over the next 12 months, movements in the award dependent and over award sector will be in the order of $17 a week, or 3–4 per cent per annum. Movements for those covered by agreements will mostly be 3–5 per cent.
Buchanan predicted the proposed IR changes will have a profound impact in coming years. He argued that in two to five years it was likely those dependent on awardz would fall to 5 per cent and those on unionised agreements to 15 per cent.
The big increase in individual contracts would occur in the lower and middle segments of the labour market. The reductions in earnings for these people would occur in the lower skills sectors of the private services sector, such as retail and hospitality.
These developments were likely to ensure that any potential wage pressures associated with skill shortages and an ageing population were quarantined to particular pockets of the labour market and would not result in a generalised rise in wages, according to Buchanan. His comments were echoed by acirrt senior researcher, Mark Cole, who noted that all OECD countries had experienced both skill surpluses and shortages over the past few decades.
According to Cole, high rates of unemployment amongst lower skill workers and churn in small and medium sized firms across productive and service sectors allowed many employers to avoid the need for training or to pay attention to workforce development and retention.
Things are changing fast, although Cole noted that generalised skill shortages were symptomatic of an overheating economy prior to lower rates of growth.
