Australian workers saw their pay packets swell in the September quarter, with latest data showing wage growth hitting the highest rate in three years.
The September 2018 quarter saw wages increase by 0.6 per cent, according to the Australian Bureau of Statistics’ Wage Price Index. That took the annual rate to 2.3 per cent.
“There was a higher rate of wage growth recorded across the majority of industries in comparison to this time last year, reflecting the influence of improved labour market conditions,” ABS chief economist Bruce Hockman explained.
“Annual wage growth at the Australia level was 2.3 per cent – the highest growth rate since September quarter 2015.”
Of particular note was a pick-up in the private sector wages, which rose by 2.1 per cent in the quarter – still behind the public sector’s 2.5 per cent increase, but up on the 2 per cent recorded in the June quarter and above the official inflation rate of 1.9 per cent.
Low wage growth has been blamed as one of the factors behind a string of retail collapses in recent years and a slump in business confidence among SMEs, as consumers tighten their belts and reign in spending.
Mr Hockman noted a fairly wide spread in wage growth among the states and territories.
The booming Tasmanian economy saw wages pick up by 2.6 per cent over the year to September, while Western Australia saw a below-inflation increase of 1.8 per cent.
He added that healthcare and social assistance continues to see the strongest wages growth of any sector, while mining and retail trade have the softest.
“Getting wages growing again has never been about finding a magic pudding, it has always been basic economics. When businesses thrive, Australians thrive,” Jennifer Westacott of the Business Council of Australia said in response to the ABS data.
“Productivity growth has been, and will remain, the key long run driver of real wages growth. Today’s data also provides more evidence that productivity and real wages continue to be linked.
“The message here is simple – keeping Australia globally competitive, and attracting the investment we need to keep growing, is the best thing we can do to keep wages growing.”
She added: “These results are a positive sign, but they must be a call to action for our political leaders. It’s time to double down on attracting the investment we need to boost productivity and grow wages.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.