May 23, 2023

  • In March quarter 2023, the seasonally adjusted WPI rose 0.8% this quarter and 3.7% over the year in Australia.
  • The private sector rose 0.8% and the public sector rose 0.9%.
  • The most significant industry contributors to wage growth were Education and training (1.5%) and Professional, scientific and technical services (0.9%).

Annual growth lifts across private and public sectors

An increase in the size of average hourly wage change in both the private and public sector was the main driver of wage growth over the quarter.

Seasonally adjusted private sector wages rose 0.8% over the quarter. Annual growth lifted to 3.8%, from 3.6% in December quarter 2022. This is the highest annual growth recorded for the sector since June quarter 2012.

Public sector wages rose 0.9% over the quarter. Annual growth increased from 2.5% in the December quarter 2022, to 3.0% in the March quarter 2023. This is the highest annual growth since March quarter 2013.

While the public sector recorded higher quarterly growth, the much larger size of the private sector meant it was the main driver of Australian wage growth.

Increased contribution from enterprise agreements to total wage growth

Jobs covered by individual arrangement accounted for just over half of the recorded wage growth in March quarter 2023. A similar proportion of jobs covered by individual arrangements had a wage increase compared to the same quarter last year. However, there was higher growth for this group of jobs due to higher average wage increases, reflecting current labour market conditions.

A larger than usual March quarter contribution from jobs covered by enterprise agreement was driven by newly negotiated enterprise bargaining agreements across both sectors and changes to public sector wage caps.

Share of jobs with a wage rise

The share of jobs receiving smaller wage rises has fallen, while the share of jobs receiving larger wage rises grew.

Wage outcomes over March quarter 2023 saw a continued lift in the share of jobs receiving wage rises of between 4 to 6%, which is the highest share since 2009.

The share of jobs with a wage rise of 2% or less has fallen from over 50% in mid-2021, to less than 20%.

Wage growth insights

Since the beginning of 2021, analysis shows there was a significant increase in the proportion of jobs recording a larger annual wage rise compared to the same time last year.

March quarter 2023 saw 60% of jobs record a higher wage rise compared to the year before. This is the highest proportion recorded since the start of the analysis in 2003.

Sector wage growth

Private sector

The average hourly wage change for private sector jobs recording a wage movement was higher at 4.3%, compared to the same quarter last year (3.4%), suggesting ongoing tightness in sections of the labour market. However, the same proportion of jobs (14%) recorded wage growth in March quarter 2023 and March quarter 2022.

Public sector

In the public sector, the average hourly wage change lifted to reach 3.0%, the highest recorded since December quarter 2012 (3.2%). Timing of enterprise bargaining, and state wage outcomes coupled with regular March quarter increases resulted in the highest proportion of public sector jobs to receive a wage rise in over four years.

Industry wage growth

Original estimates:

  • Jobs in the Education and training (1.5%) and Professional and scientific services (0.9%) industries were the main drivers of wage growth this quarter.
  • The Education and training industry recorded the highest quarterly index growth at 1.5%. Wage growth in this industry was driven by increases for jobs in New South Wales and Queensland primary education.
  • The Accommodation and food services industry recorded the lowest quarterly growth (0.1%).
  • The Wholesale Trade and Other services industries recorded the highest annual growth (4.4%). The Public administration and safety industry recorded the lowest annual growth (2.9%) across all industries.

Source: Australian Bureau of Statistics
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