Wages grew by 4.1% over the year to June, according to the Australian Bureau of Statistics (ABS).
The figure means wages held steady from the 4.1% annual growth reported in the last quarter. It follows a 15-year high wage increase of 4.2% reported in December 2023.
Wage growth is predicted to slow over the year ahead, as the Government and Reserve Bank continue efforts to bring inflation (currently 3.8%) within a 2-3% target range.
Breakdown
The ABS’ Wage Price Index (WPI) tracks changes in the hourly wages earned in a range of jobs selected to represent the whole economy.
Annual wage growth for the year to June 2024 was highest in Tasmania (5.1%), and lowest in Victoria (3.3%).
Workers in the healthcare and social services saw a 5% rise in annual wages — the highest of any industry.
Workers in the retail, food services and administrative industries also saw wages increase above the national average.
ABS head of prices statistics Michelle Marquardt said a stronger increase in public sector wages was largely due to “Commonwealth public sector agreement increases,” like pay increases for aged care workers.
Some of the slowest annual wage growth was reported in the real estate industry (3.6%) and arts and recreation (3.3%).
Rising prices
Australia has been in a period of high inflation (rising prices) since 2022. Wages commonly increase during these periods, to meet rising costs.
As part of the latest Federal Budget, the Australian Government projected wage growth to slow over the coming years, as inflation is expected to stabilise following two years of increases.
The Government said it expected wage growth to slow to 3.25% over the next two years, before rising slightly to 3.5% from 2026.
Real wages
As wages have grown, so have the prices of essential items (inflation).
In the June quarter, wage growth was 4.1%, outpacing the rate of inflation (3.8%). This means ‘real’ wages increased by 0.3%.
This suggests that more Australians are seeing an increase in their ‘real’ wage — how much wages grow above the rate of inflation.
The Government projects inflation to drop to below 3% by the end of 2024, and further rises to ‘real’ wages.
The next ABS wages update will cover the July quarter (Jul-Sept).
It will be the first Wage Price Index (WPI) since minimum wages increased by 3.75% on 1 July, after the Fair Work Commission announced the change in June.
Both the ‘national minimum wage’, which affects 1% of the workforce, and minimum award wages, which cover 2.6 million Australians, are covered by this increase.
This increase could lead to a spike in the next WPI (out in November), despite longer-term predictions of slowing wages.
