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Wage Growth Indicators

February 9, 2018

The trends in enterprise bargaining are still providing low wage growth of approximately 2.5% average annual wage increase. As a result of collective bargaining and union or third party involvement, enterprise agreements tend to provide a higher wage outcome than the across the economy wage indicators. such as the Wage Price Index. This index provides the overall wage growth is a modest 2.0% for the 12 months preceding the September 2017 quarter.

 

This low wage growth is a result of market adjustment from the high wage outcomes of the resource and infrastructure booms. The indicators do not reflect the adjustment arising from the outsourcing to new contractors and labour hire to avoid the labour cost of high income enterprise agreements

 

The unexpected high national wage case decision of 3.3%, does not appear to have flowed onto  the overall national wage outcomes. Although the enterprise bargaining trends for post July are not yet available.

 

Low wage growth has become an issue for the economy in sustaining economic growth. The only levers available to the Government to influence wage growth are the national wage review and the commonwealth public service enterprise agreements. It is unlikely that the commonwealth public service will be used as a wage pace setter in the current political environment.

 

Don’t discount social media campaigns in the future targeting high profile corporations making low wage offers in enterprise agreements.

 

 

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