Wage growth in Australia, according to the Wage Price Index (WPI), has been disappointingly slow despite the very tight labour market, rising just 2.6 per cent over the year to the end of June.
“Essentially, the data are telling us the best way to get a bigger pay increase is to change jobs - either by switching to higher paying occupations, moving to higher paying roles with other employers or getting promoted.”
But there’s a nuance here: the WPI measures the wage for the job - not the worker. And that makes a difference.
Australia’s WPI is well behind comparable international indicators. The US’s Employment Cost Index was up 5.0 per cent and New Zealand’s Labour Cost Index was up 3.7 per cent in the third quarter.
Wage growth: Australia, NZ and the US