Full-time workers in Australia have seen a significant increase in earnings over the past year, with the average individual being $3700 wealthier, as per new data analysis. The Treasury’s examination of the Australian Bureau of Statistics data indicates a 3.9 per cent rise in the earnings within the first year of the Albanese government.
However, this comes with the gloomy backdrop of a six per cent inflation surge during the same period. Consequently, despite the nominal wage increase, real wages have declined once adjusted for inflation.
Dr Jim Chalmers, the Treasurer, emphasises that the raw wage increase indicates the fastest rate of growth in ten years, when excluding the upheaval caused by the pandemic. This is a stark contrast from the previous government’s average wage increase rate of 2.4 per cent.
He further elaborates that under the current wage growth rate, an average full-time worker earns $1400 more annually than they would have under the sluggish growth rate of the past.
Reflecting on the second quarter, the wage price index registered an increase of 0.8 per cent, with an annual rise of 3.6 per cent. The sectors of construction and professional services were the most significant contributors to this wage growth.
As inflation is expected to cool down to the target range of two to three per cent, the crossover point that would boost real wages may soon be on the horizon.
Mr Chalmers showcases this analysis as evidence of Labor delivering on its prior commitment to stimulate wage growth. He highlighted that after ten consecutive years of deliberate wage stagnation under the Liberals and Nationals regime, the current wage growth brings welcome relief.
He contends that this robust and sustainable wage growth is part of their economic strategy which aims to put more money in workers’ pockets. He views this wage growth as a solution to the cost-of-living issues within the economy rather than a contributor to the problem.
The lowest earners in society are reaping the benefits of the most significant pay increases, as per the analysis. The Fair Work Commission increased the minimum wage by 5.75 per cent to $23.23 per hour, or $882.80 per week, this year.
With wages for the two lowest earning groups growing at the fastest pace since records began in 2008 – 4.9 per cent for the lowest-paid workers and four per cent for the second lowest paid workers – the year to June reveals an optimistic trend.
