SME employees' median hourly rate now $0.19 less than previous month
Wages in Australian small- and medium-sized enterprises (SMEs) have declined month-on-month for the first time in six months, according to reports.
The latest Employment Hero SME Index, which monitors median wage changes as well as business growth among SMEs, found that the monthly median hourly rate went down by -0.3% from October to November, according to Retail World Magazine.
This means employees in SMEs are now working $37.77 per hour, $0.19 less than the previous month.
"After months of slowing, wages in Australia's SME sector have decreased for the first time in six months," said Employment Hero CEO and co-founder Ben Thompson as quoted by Retail World Magazine.
According to the report, smaller enterprises registered a 0.6% increase in wages. On the other hand, larger enterprises registered a -1.4% decrease in wages, while medium enterprises logged a -0.4% drop.
By location, only South Australia (0.1%), Victoria (0.2%), and Tasmania (0.3%) saw an increase in median hourly rate month-on-month.
The findings come as the Reserve Bank of Australia (RBA) said it is considering hiking interest rates in December, Reuters reported.
"As the data shows wage growth is flattening to align with inflation, the RBA must consider halting interest rate increases for at least the near term," Thompson said.
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Employee growth
Meanwhile, employee growth in SMEs slightly increased by 0.04% month-on-month, with SMEs in retail, hospitality, and tourism seeing the biggest rise with 0.2%.
By location, South Australia registered the highest growth with 0.2%. Other areas that logged an increase include:
- Tasmania (0.1%)
- New South Wales (0.1%)
- Western Australia (0.1%)
- Victoria (0.04%)
Locations that saw declines include the Northern Territory with -0.2%, while the Australian Capital Territory and Queensland both saw a -0.1% decrease.
The findings come as Australia's consumer price index went up 5.4% annually as of the September quarter, according to the country's statistics bureau.
"This critical alignment of wage growth with inflation and an ongoing decline or slowing of average employee growth in SMEs marks a potential turning point in the nation's economic trajectory," Thompson said.
"Our data indicates that the economy will continue to cool off as we head into 2024 and it is likely mid-next year, we'll see SMEs cutting back on hiring and growth plans as the economy potentially enters a small recession."