Wage Growth Slows To New Annual Low

Wages in Australia have grown at their slowest ever annual rate since the government started issuing data on wage prices nearly two decades ago.

Official figures show wages rose by 0.6 per cent in the December quarter, while the annual pace of wage growth fell to a new record low, reflecting ongoing weak conditions for businesses and pointing to low inflation and interest rates for the foreseeable future.

For the year to December, the Australian Bureau of Statistics’ wage price index rose 2.5 per cent, in line with analysts surveyed by Bloomberg.

That rate is above the inflation rate of 1.7 per cent, which fell in the most recent ABS release.

The seasonally adjusted annual wages increase was the lowest result since the ABS started issuing the data in 1997.

The index measures movement in underlying wages by calculating the change in wage and salary cost across a range of occupations.

Wages growth has slowed as Australia’s resource-rich economy undertakes a difficult transition away from growth led by mining. Commodity prices are also falling sharply, delivering a cut to national income and driving unemployment higher. Non-mining investment is still sluggish, compared to the drop in investment from the mining boom.

In the private sector, wages excluding bonuses rose 0.6 per cent in the third quarter and by 2.5 per cent from a year earlier. Public-sector wages climbed by 0.7 per cent in the third quarter and by 2.7 per cent from a year earlier.

The information media and telecommunications industry had the largest quarterly wage rise of 1.2 per cent due to regular December quarter pay increases, while the smallest quarterly rise across all industries was the accommodation and food services industry, where wages rose 0.2 per cent.

This news story is reprinted from www.businessspectator.com.au

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