iscover
The latest Australian Bureau of Statistics (ABS) data has shown a slight uptick in wages over the September quarter, which at face value is good news for Aussie workers. Yet, a deeper look reveals a culmination of issues.
According to the recent ABS data, the Wage Price Index (WPI) the last quarter witnessed a 0.8 per cent growth in wages right across Australia. This accumulates to 3.5 per cent higher than the same period in 2023.
Despite the seemingly good news, industry leaders have shared concerns, arguing that a culmination of ongoing issues dispels the jovial sentiment that the WPI data offers. Ben Thompson, chief economist at Employment Hero, explained that some detractors may paint a greyer picture than the data does.
“Wages continue to rise at high rates. Employment Hero data shows wages grew 5 per cent year on year, and 2.9 per cent over the quarter, outpacing the ABS Wage Price Index’s 3.5 per cent yearly increase. This is driven by strong demand for talent in sectors like construction and trades, where wages saw a notable 10 per cent rise year on year,” Thompson said.
“However, growth from September to October showed full-time wages remained flat (0 per cent) month on month for the first time in over a year; something we will keep a very close eye on. Meanwhile, casual wages rose 4.3 per cent year on year.”
Along with this, Thompson spoke on the drop in average hours worked, alluding to the fact that although wages are on the rise, the decrease in hours somewhat cancels out the growth.
“Employment Hero’s data on quarterly wage growth in healthcare/community services at 3.0 per cent is significantly higher than the ABS data on healthcare and social assistance at 1.7 per cent,” Thompson said.
“Despite wage gains, reduced hours are complicating the outlook, particularly for casual and part-time roles dependent on shifts or overtime.
“Average hours worked fell 6.0 per cent year on year nationwide, with South Australia experiencing a sharp 9.6 per cent drop. For employees, this reduction means that while wages are increasing to stay competitive, fewer hours are cutting into actual take-home pay, especially in roles where stable hours are essential.
“This balancing act reflects the broader complexities of Australia’s labour market, as SMEs face rising wage pressures, adjusting hours to adapt to the cost of operating.”
Kylie Green, managing director for APAC at Reward Gateway, also shared a sentiment that warned Aussie workers not to rejoice too much, reminding them that wage growth and the reported inflation drop are not overnight solutions.
“[The] Wage Price Index increase will likely be widely welcomed by employees across Australia – particularly following the news that inflation has fallen to its lowest rate in three and a half years,” Green said.
“While these updates will ultimately encourage the loosening of purse strings, we must also acknowledge that they are not overnight solutions to the ongoing cost-of-living crisis.
“Despite inflation rates slowing, the cost of most goods and services in Australia continues to rise. While lower petrol and power costs – driven by easing global oil prices and government rebates – have helped offset some of these expenses, they haven’t alleviated the pressure on day-to-day costs for most households.
“This is likely felt the most in sectors with modest wage growth, such as arts and recreation, financial and insurance services, media and telecommunications, real estate and wholesale trade. These wage increases, while welcome, may fall short of keeping pace with the current inflationary trajectory. This is where employers come in.”
As Green explained, the pressurised situation that a large amount of modest-earning Aussies are going through is not simply alleviated by dwindling inflation rates or leisurely increasing wages. Instead, employers across various industries can get creative to uplift their employees during a tumultuous financial period.
“Seventy-four per cent of business and HR decision-makers find it difficult to meet staff expectations for salary growth in the current economic climate. However, there are a number of impactful initiatives beyond a traditional pay increase that can be used to help make their money go further, especially in the lead-up to the busy Christmas period. ,” Green said.
“One solution that can be easily integrated in businesses of all sizes is employee discount programs – an affordable alternative to when a pay increase or Christmas bonus isn’t possible. These programs offer employees discounts for hundreds of retailers, covering everything from the weekly grocery shop to petrol and pet care.
“What’s more, they’ve been proven to increase disposable incomes by 5 to 10 per cent. That’s adding an extra $3,500 annually for an employee earning $70,000, for example! These benefits not only support teams in the short term, but can introduce long-term saving opportunities to help set them up for a strong 2025.”
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
