wage growth stagnant

No Wage Relief in Sight

‘Jobs and growth’ was the slogan for the Turnbull government in the 2016 election race. And while there has been jobs growth — 400,000 new jobs in fact — wages remain stagnant.

With jobs growth, one may think that also lends itself to wage growth. Yet that hasn’t been the case so far.

According to the ABC, the government believes that the unemployment decline will increase wages; well, that was their plan, anyway. With the latest wage price index (WPI) figure set to be released this week, it doesn’t look like it’ll get worse for Aussie workers. That doesn’t necessarily mean it’ll get better, either.

And with rising household costs, it’s a wonder the economy isn’t doing any worse.

According to the ABC, the WPI will show growth of 0.5% for the past quarter, and a 2% growth for the year to date. And while that’s ‘growth’ in literal terms, it doesn’t help Aussie households all that much.

The economic team at Macquarie Bank noted recently:

While wages growth appears to have broadly found a base, we remain concerned about near-term outcomes given average wages growth in newly negotiated collective bargaining agreements appears to be even lower than the agreements they replace.

With Aussies desperate for work, they’ve negotiated their wages down. This is evident in the graphs below:

Australia Wage Price Index vs Enterprise Bargaining Agreements

Source: Thomson Reuters Datastream, ABS, ABC News

So while wages haven’t increased, the Reserve Bank of Australia’s assistant governor Luci Ellis stated that businesses were using other strategies to keep their staff:

‘…we hear that firms are increasingly using other creative ways to attract and keep staff

These include everything from hiring bonuses, to offering extra hours, to increasing perks and workplace conditions.’

And while businesses are happy to negotiate extra incentives to keep their staff, they are still very concerned about rising costs. Meaning that the everyday worker misses out on wage increases.

While wage growth remains minimal, and businesses are coming up with creative ways to keep their staff, that won’t last forever. Workers won’t be satisfied forever with these incentives; as a result, wages will grow. It’s just a matter of when.

Alana Sumic

Alana Sumic

Alana Sumic is an editor and writer for The Australian Tribune. She has a Bachelor of Arts from La Trobe University and a Masters in Publishing and Editing from Monash University.

She specialises in national and international politics and current affairs. She’s passionate about delivering the unfiltered stories that matter to you, on all topics.

Alana Sumic

Latest posts by Alana Sumic (see all)

Comments: 1

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

  1. One thing about the wages debate (at any level) is the notion that there’s a gender imbalance. Not where I work. The secretaries are 99% woman and they are paid around $5 more per hour than I do and I’m a treatment plant operator with the responsibility for clean drinking water and a clean environment (water and sewerage). They’re only responsible for answering phones! Saying that, men and women where I work are all paid exactly the same hourly rate if they’re in the same job! This is due to a little thing called a state award! So Unless we’re talking about management and above positions, I see no evidence that women get paid less than men. I guess this may be an aside to the article in general, but people better brace themselves for more income woes for the foreseeable future since the top down approach is not going to work and the RBA has hinted to this also. Good luck people. If companies across the board are going to get a tax cut don’t expect them to hand on higher wages or lower prices. It never has and never will happen.