The rate of wages increasing is at its highest in nearly a decade, however, due to the increasing cost of living, Australians will most likely not experience a real increase in their wages until next year.
This news comes from data released by the Australian Treasury, which takes into account the Australian Bureau of Statistics’ (ABS) data which shows that wages grew by 3.1 percent in the year to the September quarter.
The government report states that wage growth was mainly driven by higher award wages. It also noted that there had been a broad-based increase in wages across most industries, with the biggest increases seen in the electricity, gas, water, and waste services sector (6.9 percent) and the health care and social assistance sector (4.6 percent).
However, while wages are growing faster than they have in the past, the cost of living has also grown faster, meaning the increase in wages is not necessarily translating into an increase in real.
In the September quarter, wages for low-skilled workers rose by 2.3 per cent – the quickest rise through-the-year since the March quarter of 2013 and far outpacing the average growth rate of 2.2 per cent from the past five years. However, real wages are still declining as they remain below the annual rate of inflation at 7.3 per cent.
The good news is this increase in payment is likely to filter down to other sectors and job roles, as businesses will be forced to offer more competitive salaries in order to remain competitive and attract the best talent.
Treasury Jim Chalmers stated the real wage growth is anticipated in 2024 due to inflation decreasing over the next year, peaking in December.
Dr Chalmers told the ABC after Labor published the Treasury analysis on Tuesday that the government expects inflation to drop, but to remain higher than ideal for a longer period.
“To combat the cost of living pressures, it is essential that we ensure Australian workers are able to earn an adequate wage to sustain their families and to achieve success,” he said.
