Despite labour shortages Australian wage growth has barely budged
Just three days out from a federal election where wage increases have been one of the more contentious issues, Australian wage data has been released and it hasn’t met the expectations of Australian economists.
Despite labour shortages, Australian wage growth has barely budged, lifting from 2.3% to 2.4%, less than half the headline inflation rate, meaning real wages dropped 2.7%.
Total wages grew by only 0.65% in the March quarter, missing analyst’s expectations of 0.8% growth. Private sector wages grew by 0.65% over the quarter, and public sector wages grew by 0.56%.
The Reserve Bank Australia (RBA) board minutes were released to The Australian, who reported them to be relying on their business liaison program, which shows accelerating pay rates as labour shortages bite.
“Given the tight labour market and increase in job mobility, more firms were having to pay higher wages to attract and retain staff, and labour costs were picking up at a faster rate than over the preceding year,” the minutes read.
“While the inertia arising from multi-year enterprise agreements and current public sector wages policies would continue to weigh on aggregate wages growth in the near term, a period of faster growth in labour costs overall was in prospect.”
The RBA has forecast the wage price index will climb to 3.75% by mid-2024, but the real pay would only turn positive towards the end of the year.
The data comes out just after Anthony Albenese told voters that if he was elected, he would lobby the Fair Work Commission to ensure minimum wage keeps up with inflation. A move that Morrison has slammed as reckless and dangerous.
