The Australian Bureau of Statistics (ABS) has released the latest Wage Price Index figures for the June 2018 quarter, showing a low increase of 0.6 percentage points for the seasonally adjusted index.
The trend and seasonally adjusted indexes for Australia both rose 2.1 percentage points through the year to the June 2018 quarter.
Across Australia, Western Australia and the Northern Territory both recorded the lowest wage growth through the year to the June 2018 quarter (1.5 percentage points), while Victoria and Tasmania both recorded the highest growth at 2.5 percentage points.
In terms of industry, the largest rise in wage index figures within the June 2018 quarter occurred in wholesale trade (1.1 percentage points). Through the year to the June 2018 quarter, wage growth ranged from 1.3 percentage points for the mining industry to 2.7 percentage points for the health care and social assistance industry.
In a statement released today, ABS Chief Economist Bruce Hockman said that “wage growth in Australia has grown at an annual rate of 2.1 per cent, continuing to stabilise between 2.0 and 2.1 per cent over the past four quarters.”
“Annual growth across industries is varied with diverse wage pressure across the labour market,” said Mr Hockman.
CPI Inflation through the year to the June 2018 quarter also increased by 2.1 percentage points, mirroring the Wage Price Index for this same period.
Why is wage growth still so stagnant?
In the August Statement on Monetary Policy released last week, the Reserve Bank of Australia noted that high levels of unemployment could be to blame.
“The Australian economy remains on track to achieve lower unemployment and higher inflation over time.
“The unemployment rate is therefore forecast to decline, reaching around 5 per cent by end 2020.
“As the labour market tightens, wages growth can be expected to pick up gradually from current low rates.”