Australia's wage price index jumps 3.7% annually in Mar 2023

18 May '23

3 min read

Pic: Shutterstock/sweettoiletpaper

Insights

Australia's WPI saw a 0.8 per cent quarterly and 3.7 per cent annual rise in March 2023.
The public sector experienced a decade-high wage growth, largely due to enterprise agreement bargaining and raised wage caps.
Wages in wholesale trade and other services grew the most annually at 4.4 per cent; both public and private sectors showed positive trends.

Australia recorded a 0.8 per cent quarterly rise and a 3.7 per cent annual rise in the seasonally adjusted wage price index (WPI) for March 2023. The public sector experienced a significant hike in wages, noting the highest quarterly growth of 0.9 per cent and annual growth of 3.0 per cent in the last ten years. This surge was facilitated by outcomes from enterprise agreement bargaining, regular scheduled rises, and uplifted wage caps.

A shift is observable in job sectors, with a larger proportion receiving substantial wage increases and a dwindling share getting smaller wage increases. Yearly wage growth was most significant in the wholesale trade and other services industries at 4.4 per cent, the steepest annual surge in over a decade, according to data released by the Australian Bureau of Statistics (ABS).

The WPI, which measures labour price changes independent of shifts in the labour force, hours worked, or employee characteristics, showed a positive trend in both private and public sectors. The private sector reported a 0.8 per cent rise over the quarter, and the annual growth escalated to 3.8 per cent from 3.6 per cent in the December quarter 2022, marking the highest growth since June quarter 2012.

In the public sector, wages rose by 0.9 per cent over the quarter, and the annual growth rate increased from 2.5 per cent in the December quarter 2022 to 3.0 per cent in the March quarter 2023. This is the highest growth since March quarter 2013. Although the public sector recorded a higher quarterly growth, the overall wage growth was primarily driven by the larger private sector.

ABS also found that jobs covered by individual arrangement accounted for over half of the wage growth in the March quarter 2023. The share of jobs receiving larger wage increases expanded while that of jobs receiving smaller wage rises shrunk.

Geographically, the Australian Capital Territory witnessed the highest quarterly growth at 1.3 per cent, while Western Australia and Tasmania recorded the highest annual increase in wages at 4.1 per cent. South Australia and Northern Territory saw the lowest quarterly growth at 0.6 per cent, with the Northern Territory also having the lowest annual growth at 2.9 per cent.

Leigh Merrington, ABS acting head of prices statistics, said: “Annual wages growth of 3.7 per cent is the highest since September quarter 2012, reflecting low unemployment, a tight labour market, and high inflation.

“Wage outcomes over the March quarter 2023 saw a continued lift in the share of jobs receiving wage rises of between 4 and 6 per cent, which is the highest share since 2009. The share of jobs with a wage rise of 2 per cent or less has fallen from over 50 per cent in mid-2021 to less than 20 per cent.”

Fibre2Fashion News Desk (NB)

More Textiles News - Australia...