Wages rise but inflation keeps workers poorer

The seasonally adjusted WPI rose 0.7 per cent in June quarter for the third consecutive quarter as demand for skilled jobs continued to build wage pressure.

Michelle Marquardt, head of prices statistics at the ABS, said after three-quarters of consistent wage growth, driven mostly by wage rises across the private sector, the annual rate of growth was 2.6 per cent.

“This is the highest annual rate of wages growth since September 2014 expanding demand for skilled jobs over the last 12 months has continued to build wage pressure across a broader range of industries and jobs, reflected in the increasing size of pay rises,” Ms Marquardt said.

Private sector wages rose 0.7 per cent over the June quarter, with the public sector rising by 0.6 per cent. Annually private sector wages (2.7 per cent) rose more strongly than public sector wages (2.4 per cent). The public sector has a large proportion of jobs paid under multi-year enterprise agreements that tend to be less reactive to labour market conditions.

In the private sector, a higher proportion of jobs received a wage increase compared to recent June quarters. The average size of private sector hourly wage rises increased to 3.8 per cent, up from 2.7 per cent this time last year. This is the highest rate of average wage movement for the sector since June 2012.

In original terms, the rate of quarterly wage growth across industries ranged from a high of 1.4 per cent for the construction industry to 0.1 per cent for the accommodation and food services industry.

Annual wage growth also varied by industry, from 3.4 per cent for the construction industry, which recorded its highest annual rate of growth since December quarter 2012, to 2.2 per cent for the mining and electricity, gas, water and waste services industries.

Western Australia recorded the highest rate of quarterly wage growth (0.8 per cent) while Queensland and Tasmania recorded the highest rate of annual growth (2.9 per cent). Northern Territory recorded both the lowest rate of quarterly (0.3 per cent) and annual wage growth (2.0 per cent) for the second consecutive quarter.