The Australian Bureau of Statistics (ABS) has released its Wage Price Index for September 2022, showing a 1.0 per cent rise in the index for the September quarter and a 3.1 per cent rise annually.
However, despite significant pay rises for minimum wage and award-dependent workers being included in the report, average wages are still going backwards by 4.2 per cent due to high inflation and ongoing anaemic wage growth across the rest of the economy, according to the Australian Council of Trade Unions (ACTU).
It said this breaks the previous record for all-time real wage cuts, set by the last set of wage growth numbers.
According to the ACTU, these figures demonstrate the urgent need for the changes to the bargaining system contained in the Secure Jobs, Better Pay Bill, which it said will enable millions of workers across the economy to secure their first pay rises in a decade.
It added that modelling released by the Centre for Future Work estimated that the average wage rise per worker if the Bill raises bargaining coverage to the OECD average for mixed enterprise and multi-employer bargaining would be almost $1,500 in the first year after the Bill becomes law.
ACTU assistant secretary Liam O’Brien said, “These numbers show the limits of what can be done with a broken system. Even with historic wage rises flowing through this quarter to minimum and award-dependent workers, everyone is still going backwards at an average of 4.2 per cent.
“To get pay rises across the economy we need to make bargaining more accessible, in more workplaces. The Secure Jobs, Better Pay Bill is a critical step towards achieving that goal, and the faster it becomes law the faster Australian workers will see the benefits.
“Big businesses are campaigning against the Bill because they will never support wage rises for working people. They are fighting to protect this system, which sees massive pay cuts for working people, while profits and executive pay continue to set new records.”
ABS program manager of prices Michelle Marquardt said, “This is the highest quarterly growth in hourly wages recorded since March quarter 2012. In seasonally adjusted terms, this growth was primarily driven by increases in wages for the private sector which grew at twice the rate of wages in the public sector (1.2 per cent compared to 0.6 per cent).”
“Labour market pressures in the private sector combined with the largest Fair Work Commission award increase in more than a decade saw rises in both the size of average wage changes and the proportion of private sector jobs recording a wage change.
“The average size of hourly wage increase for those jobs where the wage rate moved was 4.3 per cent, up from 2.9 per cent in the September quarter 2021. Nearly half (46.4 per cent) of private sector jobs recorded a change in their hourly wage rate this quarter compared to around one third (33.9 per cent) in the same quarter last year.”
According to the ABS, the annual rate of growth at 3.1 per cent is the highest recorded since March quarter 2013.
It also found that in this quarter, a significant contribution to wages growth came from jobs paid by individual arrangement. These are mostly private sector jobs where employers paid increases based on end of financial year wage and salary reviews or interim increases as a retention strategy.
The report identified that the highest quarterly and annual growth was recorded in the retail trade industry at 2.4 per cent and 4.2 per cent. The annual rate of growth included two award increases within the year.
The education and training industry recorded the lowest quarterly (0.8 per cent) and annual (2.2 per cent) growth across all industries.
“The increase in the Wage Price Index released by the ABS today shows that the pace of wages growth is picking up strongly. This is occurring without the assistance of the heavy-handed provisions in the Government’s IR Bill currently in the parliament,” Ai Group chief executive Innes Willox said.
“Following the long period of low inflation since the global financial crisis and the interruption of the COVID pandemic, wages growth is on the move with the quarterly increase in wage rates the highest in more than a decade.
“Wages growth has begun to catch up with inflation following its sudden rise since the end of 2021.
“The pick-up in wages growth is occurring organically and is particularly evident in the 4.3 per cent increase in private sector wages that were renegotiated over the course of the September quarter.
“It provides still further evidence of the ill-considered and unnecessary changes proposed in the IR Bill the Government is trying to rush through the parliament.”
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