'Employees still not getting what they need'

Unemployment rates may be 'historically' low, but wage growth remains stagnant

BY Paulinet Tamaray 23 Sep 2022

Australia’s minister for employment and workplace relations, Tony Burke, said that the country’s workers have yet to receive what’s due to them, a priority that the federal government strongly advised employers to consider.

“More Australians are in jobs and getting the work hours they want – but they’re still not getting the wage increases they need,” Burke said in a media release.

The minister referred to a new report from the Australian Bureau of Statistics (ABS) which showed that “the number of people employed is up – by 33,500 – and the number of underemployed is down.” The government clarified that the country’s unemployment rate “remains at an historically low level,” and the slight uptick is due to “a welcome increase” in the participation rate.

‘Close the loopholes’

Two states have registered their lowest unemployment rates since records began in 1978, with South Australia at 3.9% and Queensland at 3.2%. Burke has described the current data as “particularly encouraging.”

However, the minister added that “these economic circumstances should be resulting in stronger wages growth.”

“These results once again demonstrate why we need to update the workplace system and close the loopholes that are undermining wages growth,” Burke said.

Outcomes from the Jobs and Skills Summit 2022

Burke said that the recently concluded Jobs and Skills Summit was crucial in bringing employers, unions and other groups together to address critical issues.

“As the summit made clear, our nation needs to do a better job at reducing barriers to employment so that all Australians have the opportunity to participate to their full potential – in secure and safe work, with decent wages,” he said. “Our goal is to build a better, better-trained and more productive workforce, boost incomes and living standards, and create more opportunities for more Australians.”

The new ABS report

Burke highlighted ABS’ recently released data with the following key points:

The seasonally adjusted unemployment rate increased to 3.5% in August.
However, the level of seasonally adjusted employment increased by 33,500 in August.
The participation rate increased by 0.2 percentage points over the month, to 66.6%. That’s close to the record high of 66.8% in June 2022.
This increase equated to a 47,500 rise in the labour force over the month, to 14,079,800 in August.
The underemployment rate decreased by 0.1 percentage points over the month, to 5.9%.
This is well below the 8.8% recorded in March 2020 (when Australia recorded its 100th case of COVID-19).
The employment-to-population ratio increased over the month by 0.1 percentage points, to 64.3%, close to the record high of 64.4% in June.
The youth unemployment rate rose by 1.4 percentage points over the month, to 8.4% in August. However, it remains well below the 11.6% recorded in March 2020.
The youth participation rate fell by 0.2 percentage points over the month, to 71.5% in August, but remains well above the 68.3% recorded in March 2020.

“Results underscore the resilience and strength of demand in the Australian labour market,” Burke said. “Expectations for low unemployment remain solid. But with a labour market this tight we should be seeing stronger wage growth – and our government is committed to delivering it.”

HRD previously reported on how “the spiralling cost of living” is “pushing employers to increase their salary budgets by an average of 20% to account for inflation,” according to Robert Half’s 2022 Salary Guide.

“Nearly all of the 300 Australian hiring managers surveyed said they were prepared to raise awards to a portion of their workforce,” the report said.