Australian workers’ real wages fell by 3.5% in the year to June, despite a small increase in wages growth in the June quarter.
The June Wage Price Index data released this morning by the Australian Bureau of Statistics showed wages excluding bonuses grew in the June quarter by 0.7% — the same level as in the March quarter, further undermining claims that a tight labour market means accelerating wages growth.
The result brought growth for the 2021-22 year to 2.6%, up from 2.4% for the year to March — but 2.6% was achieved only because the June 2021 result of just 0.4% fell out of the annual figure. That compares with inflation of 6.1% for the 2021-22 year. In the June quarter alone, real wages fell by 1.1%.
Private sector wages grew by 0.7% and public sector wages by 0.6% — the same outcome as in the March quarter — demonstrating public sector wages caps continue to weigh down wages growth.
Despite the 2.6% annual result coming in at the Reserve Bank forecast, the lack of faster growth in the June quarter suggests the RBA’s much-vaunted “business liaison” telling it wages growth is rapidly growing are misleading. Australians workers remain stuck with stagnant wages and huge real wage falls.
Real wages are in freefall elsewhere as well.
Yesterday Britain’s Office of National Statistics revealed that real wages in the UK fell a record 3.0% in the three months to June — despite unemployment of 3.8% in the June quarter when 160,000 jobs were created (a similar situation to us, NZ, Canada, the US).
While average pay — excluding bonuses — increased by 4.7% in the June quarter, according to the ONS, the cost of living is increasing at an even faster rate and outpacing wage growth. Including bonuses average pay rose an annual 5.1% but that was still far behind consumer price inflation which rose at an annual rate 9.4% in the June quarter. The Bank of England reckons it could reach 13.5% from October onwards.
Darren Morgan, ONS director of economic statistics, said UK real wages were “still dropping faster than at any time since comparable records began in 2001”.
The Kantar research group released data on Tuesday as well showing UK grocery prices jumped 11.6% in the four weeks to August 7 — that’s the highest rate of grocery price inflation since Kantar started collecting the data 14 years ago.
And we thought things were bad here.
