Real incomes shrink as wages growth of 0.7% in March quarter falls behind inflation

Shoppers in a supermarket in Canberra. The rising cost of living has put pressure on the government over sluggish wage growth. Photograph: Xinhua/REX/Shutterstock

Australian wage growth barely budged in the March quarter, with salaries increasing at less than half the headline inflation rate, stoking concerns pay packets continue to shrink in real terms.

During the first three months of 2022, the seasonally adjusted wage price index (WPI) rose 0.7% from the December quarter to be 2.4% higher than a year earlier. Economists had tipped a quarterly and yearly rise of 0.7-0.8% and 2.5%, respectively.