Australian Bureau of Statistics data yesterday confirmed that we are in the midst of a period of wage stagnation, with no sign of any improvement.
The ABS reported that the Wage Price Index rose a seasonally adjusted 0.6% in the June quarter to be up an annual 2.3% for the 2018-19 year, under the downwardly revised Federal budget forecast of 2.5% (cut from 2.75%).
The quarterly increase was due to a 0.8% rise in public sector wages, namely in the healthcare and social assistance industry, according to the ABS release.
ABS Chief Economist, Bruce Hockman said: “Wage growth continues at a steady rate in the Australian economy on the back of strong public sector growth over the quarter. The most significant contribution to wage growth this quarter came from the public sector component of the health care and social assistance industry, where a number of large increases were recorded in Victoria under a plan to ensure wage parity with other states.
The year-on-year wage price index growth, while in line with predictions for June, has remained around 2.3% since the September quarter of last year.
And there’s nothing to dispute that the Reserve Bank’s view in last Friday’s Third Statement on Monetary Policy when it said about the prospects for growth in wages this year.
“Wages growth is expected to remain stable over the next year. At the time of the May Statement, wages growth was expected to continue to lift modestly over the year ahead…there is limited upward pressure stemming from current labour market conditions and the majority of surveyed firms in the liaison program now anticipate little change in wages growth over the next year,” the bank said.
In original terms, annual wages growth to the June quarter 2019 by industry ranged from 1.7% for wholesale trade to 3.3% for healthcare and social assistance (thanks to the big rises in Victoria).
Western Australia recorded the lowest annual wage growth of 1.6% while Victoria recorded the highest of 2.9%. Without the strong Victorian growth, the national annual rise would have been closer to 2%.