Annual wage growth reaches highest rate since 2012

Which sector was 'main driver' of growth?

Annual wage growth reaches highest rate since 2012

Australia's annual wage growth just hit its highest since 2012, thanks to the private sector mainly fuelling this increase, according to the Australian Bureau of Statistics (ABS).

The seasonally adjusted Wage Price Index rose 0.8% in the March quarter of 2023 and 3.7% annually, ABS data revealed on Wednesday.

"Annual wages growth of 3.7% is the highest since September quarter 2012, reflecting low unemployment, a tight labour market, and high inflation," said Leigh Merrington, ABS acting head of prices statistics, in a statement.

Private sector 'main driver'

The private sector was the "main driver of growth," according to the ABS, after wages went up 0.8% during the quarter and 3.8% annually.

"A number of private sector industries have recorded annual wages growth above four per cent, with the remaining industries all above three per cent annual growth," Merrington said.

For the private sector, wages rose 0.9% quarterly and three per cent annually - also the highest for the sector in a decade.

"Enterprise agreement bargaining outcomes, together with regular scheduled rises and higher wage caps, drove the increase in public sector wages," the ABS said in its media release.

Per region, Tasmania and Western Australia registered the highest annual wage growth among all territories and states, recording 4.1%.

In Tasmania's case, this is also the state's largest annual growth in wages in over a decade.

"We have proven that our approach is working, and we assure Tasmanians that we will not rest on our laurels. We will continue to do all we can to maintain, and indeed, accelerate this momentum," said Tasmanian Treasurer Michael Ferguson in a statement.

Real wages growth still a priority

The wage growth came despite previous warnings to employers that caving in to requests of wage hike could keep inflation high.

"Wages growth isn't the problem when it comes to inflation, it's part of the solution to the cost‑of‑living pressures Australians face," the national government said in a statement.

According to the government, it was "pleasing" to see wages moving, but it noted that not everyone might feel its impact amid cost-of-living pressures.

"That's why the Budget included a $14.6-billion cost‑of‑living relief package which will help Australians with rising energy bills, rents, and make medicines cheaper," the government said.

In the same statement, the government also affirmed that the growth of real wages remains a priority, as the country's inflation begins to "moderate."

"Combined with a pickup in wage growth, this will help deliver stronger real wage growth to workers sooner," the government said.

 

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