Wage growth to be fastest in years

The Reserve Bank of Australia has just released its latest quarterly forecast for the economy, and some of the numbers should make concerning reading for employers.  The RBA thinks that the strong post- Covid recovery could mean wage growth of 3 percent by the end of 2023 – which would be the fastest growth for a decade.

"Wages growth should continue to pick up in the near term, as the remaining wage freezes and cuts implemented in 2020 are unwound and labour market conditions tighten," the central bank said.

Although there is a widely touted talent shortage, the Bank’s figures say that more than half of jobs were seeing wage growth at the moment – but that wage freezes were starting to thaw, and that it was expecting salaries to start rising almost immediately.

"Firms are generally reporting an expected return to annual wage rises of 2–2.5 per cent over the next year," the RBA said.

And the RBA’s research has also foreshadowed a coming talent shortage tsunami, saying that paying targeted sign on and retention bonuses and relying on less experienced staff was becoming more prevalent.

Australia’s average weekly wages