Wages continue to grow below expectations

Wages in Australia grew by just 0.5 per cent, leaving wages growth for the year at a steady 2.1 per cent.

This missed expectations for an increase of 0.6 per cent 

Reserve Bank of Australia Deputy Governor Guy Debelle said in a speech this week there was a risk it might take a lower unemployment rate than currently expected to generate a pick-up in wages.

The wage rises were driven by increases in the Education and training and Health care and social assistance industries.

The Australian Bureau of Statistics figures show private sector wages grew by just 1.9 per cent.

This is the same pace as consumer price inflation over the same period which means that real wages for most workers weren’t rising at all. 

Public sector wages rose higher, lifting by 2.3 per cent over the year.

The latest figures raise questions about the assumptions in last week’s federal budget, which was built on wage growth averaging 2.75 per cent over 2018/19. 

“Both the RBA and the Federal Budget forecast wages growth to return to above 3 per cent over coming years, but there is limited evidence to date that we are getting closer to this,” Commonwealth Bank economist Belinda Allen said.

Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.

Leave a Reply

Your email address will not be published. Required fields are marked *