In further evidence of how sluggish the economy was in the last months of the Abbott-Hockey era — and of how flexible Australia’s industrial relations system is — the Australian Bureau of Statistics has revealed another record low in wages growth.
Today’s wage index data shows that in the September quarter — so we’re looking back quite some distance in time — the wage price index grew by 0.6% (both in seasonally adjusted and trend terms), and 2.3% in the year to the end of September. Public sector wages grew by 0.7% and 2.7% annually seasonally adjusted, but private sector wages — that’s most of us — grew 0.5% and 2.1% in annual terms, seasonally adjusted. As the Bureau notes:
“The through the year rise for the Private sector was the smallest rate of wages growth recorded since the start of the series. The through the year series commenced in the September quarter 1998.”
This most recent example of what is now a trend over more than two years of low wages growth is hardly a result that fits with the business/conservative narrative that our IR system is broken and gives too much power to trade unions, but as we’ve repeatedly seen, they’re not interested in facts, only what they can snatch for their profits.
And the data is interesting given where much of the whingeing about how “Australia is a high cost place to do business” comes from. The mining sector, a persistent critic of our IR laws, saw growth of just 0.4% in the quarter — the equal second-lowest sector. That’s unsurprising given the slow death of the coal industry and the fall in the iron ore price — but then that’s what a flexible IR system is supposed to do — reflect changes in demand for labour.
The other equal second-lowest sector was construction, which to hear the government, the Trade Union Royal Commission’s witch-hunters and the right-wing media tell it, is filled with out-of-control CFMEU members driving up the cost of projects. If so, they’re not particularly good at it — construction wages grew by 0.4% in the September quarter and just 1.7% across the year — even lower than the beleaguered mining sector.
The worst performer of all was finance, where wages barely shifted at all — growing just 0.2% in the quarter. Education performed best, with an annual rate of 3% growth.
By way of context for all these numbers, inflation in the September quarter was 0.5% and annual growth was 1.5%. But that low number was influenced by falling oil prices. The RBA’s preferred inflation measure, the trimmed mean, reached 2.1% for the year to September, meaning that, in real terms, private sector workers had a wages freeze.
None of which augurs well for the revenue side of the budget. Treasurer Scott Morrison likes to talk a lot about the danger of bracket creep. For many workers, that’s as much an ambition as a threat at the moment.
Indeed, bracket creep is a myth in the current wages environment.
I wonder how much those figures are a reflection of the resources sector, and how much past wages growth recorded was much higher than what most were getting purely because of the influence of the mining sector.
In other words, how many people have been experiencing low wages growth for a decade or more, not just two years.
Might be more than the figures suggest.
Bracket Creep.. its the tingling feeling you get in your arse when your asking unsuccessfully for a pay rise..
Thank you Bernard!
Finally someone has dispelled the myth of bracket creep being a problem for the wage and salary earners of today.
Could this article be forwarded to our esteemed (joke!) treasurer, Moralsnone, so he can connect the lack of wages growth to the non-existent bracket creep ‘problem’?
Oh! wait a minute…..can he actually read? Might be difficult for him then!!!