Real earnings for workers continue to slide, with the most recent labor agreements showing that the typical wage increase was just 3%, despite rising inflation.
An analysis of The Sunday Age i Sun Herald of the 72 collective agreements presented this week to the Fair Work Commission, only two had wage increases higher than the latest annual consumer price index (CPI) of 5.1%. The agreements covered workers in industries such as coal mining, construction, local government, nursing homes and childcare.
RBA Governor Philip Lowe recently warned against raising wages too quickly. Credit: AAP
Although the Reserve Bank, most industry groups and some economists have warned of the risks of rapidly rising wages to meet the sharply rising cost of goods and services, this concern has yet to be to reflect in large salary increases.
The analysis showed that the average wage increase in the first year of collective agreements was 3 percent, while in the most unionized sectors, such as warehouses and construction, there was stronger wage growth.
In all, a third of the deals filed this week had pay increases of 4 percent or more, while pay increases of 2 percent or less were common in non-union deals.
Reserve Bank governor Philip Lowe recently warned of the risks of rising unemployment if wages rose too quickly to match inflation, which the bank expects to reach 7% by the end of the year. He wants wage increases across the economy of up to 3.5 percent.
ACTU secretary Sally McManus said “our biggest concern is obviously that prosperity is not being shared”. Credit: Alex Ellinghausen
“We may have increases in some parts of the labor market larger than that for a short period of time,” he said. “But if wage increases become common at 4 to 5 percent … then it will be harder to get inflation back to 2.5 percent.”
Analysis of labor agreements filed this week shows the average increase, boosted by a few very high wage results, in base hourly rates was 3.3 percent. For the March quarter, the attorney general’s investigation showed a 2.6 percent increase in the 862 labor agreements analyzed.