Wage growth spurred on by salary reviews

The ABS Wage Price Index for this quarter shows private sector wages rose 0.6 per cent in line with pre-pandemic September quarters while public sector growth rose to 0.5 per cent and continues to track below the private sector since September quarter 2020.

In seasonally adjusted WPI, the ABS reported that private sector wages have grown 2.2 per cent over the year while public sector rises are at 0.6 per cent.

NSW, Victoria, and Queensland were the main contributors to growth, and the significant industries to contribute to growth this quarter were the professional, scientific and technical services, healthcare and social assistance and construction industries.

Small, isolated pockets of demand across a number of industries saw larger increases paid to attract and retain experienced staff.

The ABS data reveals that jobs covered under individual arrangements were the main driver of a large portion of wage growth. Enterprise agreements remain a regular contributor to wages growth with a larger contribution observed this quarter.

However, despite the wage rises, the ABS noted that this quarter the proportion of jobs with wage rises was only 20 per cent compared to an average of 35-40 per cent in previous years.

Of all the jobs covered by individual arrangements, 25 per cent recorded a wage rise in September quarter 2021. A large proportion of these saw a significant shift away from their regular pre-COVID pattern of annual wage rises. Typically, around 55-60 per cent of September wage rises are annual increases, while this quarter only 22 per cent of these increases were annual.

Professional, scientific and technical services recorded the largest quarterly rise of any industry of 1.3 per cent. The annual rate of growth of 3.4 per cent for this industry was both the highest across all industries in the quarter and the highest for this industry since December quarter 2012.

Mining recorded the lowest quarterly rise of 0.4 per cent, while electricity, gas, water and waste services recorded the lowest through the year rise of 1.2 per cent, the slowest rate.