Wages Barely Outpace Inflation Amid Sluggish Real Wage Growth
In the September quarter, private-sector wages grew by 0.7%, a slowdown from 0.8% in June and 0.9% in the first quarter. However, real wages fell by 0.6% during the same quarter, leaving overall real wages 4.6% lower than their level in March 2021. The purchasing power of a typical March 2021 full-time salary, approximately $90,000, has decreased to roughly $85,862, reflecting a shortfall of about $4,138.
According to the latest Reserve Bank of Australia (RBA) Monetary Policy Statement, it is projected that real wages will not regain their March 2021 purchasing power until around mid-2044. Since March 2021, public-sector wages have risen by 14.2% and private-sector wages by 15.2%, while prices have increased by 21.8% and household living costs by 26.6%.
Data from the Australian Bureau of Statistics (ABS) indicate that state government pay rises account for approximately 82% of public-sector wage growth, while the Commonwealth public service pay contributed just 0.04 percentage points to quarterly public-sector wage growth, marking the lowest contribution since 2017. Overall, wage growth is only marginally outpacing inflation, with the RBA expecting inflation to continue to exceed wage increases.
