Tuesday, 11 June 2019

So how is Australian wage growth faring so far in 2019?

If one looks at national averages for wage growth or compensation of employees (COE) in March Quarter 2019 it looks as though no-one has been left behind.

However, first glances can be deceptive. 

COE increased 1.2% and average compensation per employee rose 0.4%.
Private COE grew 1.4%, while public COE increased 0.7%.

In the March Quarter 2019 there was negative wages growth in Tasmania, Northern Territory and the Australian Capital Territory (ACT). 

With a seasonally adjusted  -0.4% total change to pre-tax wages in Tasmania, a -0.3% total change to pre-tax wages in the Northern Territory and -0.4% total change to pre-tax wages in the ACT.

While March Quarter 2019 total percentage changes in pre-tax wages growth for the remaining states was:

Victoria 0.7%
Queensland 0.8%
New South Wales 1.6%
West Australia 1.7%
South Australia 2.0%.

Note: Compensation of Employees (COE) represents total gross (pre-tax) wages paid by employers to employees for work done in March Quarter 2019 accounting period.

Seasonally adjusted there was a 0.5% change in total hourly rates of pay excluding bonuses in Australia between December Quarter 2018 and March Quarter 2019.

Other factors to consider alongside wages……..

According to the ABS the Cost Price Index (CPI) rose 1.3 per cent per cent through the year to the March quarter 2019, after increasing 1.8 per cent through the year to the December quarter 2018.

In March Quarter 2019 CPI remained flat due to reduced costs in automotive fuel and domestic/international holiday travel & accommodation. Although over the last twelve months, food and non-alcoholic beverages group costs rose 2.3% and, in seasonally adjusted terms food and non-alcoholic beverages group rose 1.2% this quarter. While in seasonally adjusted terms this quarter education group costs rose 0.3% and health group rose 0.7%.

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