Has our wages slide reached the bottom? It looks like it judging by the data from the June quarter Wage Price Index, released by the Australian Bureau of Statistics yesterday.
As expected wage growth was again weak in the three months to June rising at the same pace as in the March and December quarters – an annual rate of 1.9%.
That news will be overshadowed by the release of July’s jobs data later this morning. Economists are looking for a small rise in new jobs and an unemployment rate around 5.6%.
Given that headline inflation was 1.9% (annual) in the June three months, it means wages kept pace with cost pressures in the quarter after falling behind in the previous quarter.
And some economists think through could be a small improvement this quarter and in the three months to December from May’s lift in the minimum wage. But t will be small and could easily disappear.
The quarter on quarter rise in June was 0.5% down from the restated 0.6% in the three months to March (0.5% originally)- 0.5 per cent over the June quarter.
Like in previous quarters, public sector wage growth is outpacing the rise in the private sector. Public sector employees saw a 0.6% quarter on rise quarter in the three months, while private sector workers say a rise of 0.4%.
Seasonally adjusted, private sector wages rose 1.8% and public sector wages grew 2.4% through the year (year on year, or yoy) to June quarter 2017, fort an overall rise of 1.9%.
By state wages growth is strongest in South Australia and the Northern Territory at 2.1% yoy, followed by NSW, Victoria and Tasmania at 2% yoy, Queensland and the ACT at 1.9% yoy and Western Australia at just 1.4% yoy as the mining investment slump continues to impact there.
By industry wages growth is strongest in health care at 2.6% yoy and education at 2.4% yoy and weakest in mining at just 1.1% yoy.
The AMP’s Chief Economist, Dr Shane Oliver says “While the decline in wages growth appears to have stabilised at around 1.9% yoy, this is still a record low in terms of the history of the Wage Price Index and means that real wages growth is zero.”
“While the weakness in mining employment is clearly dragging down wages growth in WA, average wages growth in the other states at 2% year on year is continuing to be depressed by worker insecurity, high levels of underemployment and depressed inflation expectations."
