Wages in Australia are on the rise, with many improvements since the COVID-19 pandemic.
The Australian Bureau of Statistics’ annual measure of employee earnings found the median weekly income increased to $1,300 (before tax) in the year up to August 2023. This was $52 more than the median in 2022.
This means that if you earned $1,300 a week, you were right in the middle of income earners in Australia, earning more than around half the population.
The ABS’ measure of employee earnings uses self-reported income from selected households to look at how wages are changing in Australia.
It found the highest 10 per cent of earners had a before-tax income of $2,820 per week.
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Earnings for all percentiles increased, but those in the bottom 10 per cent of wage earners had the lowest income growth between August 2022 and August 2023.
Their wages increased by 3 per cent. This compares with the 5.8 per cent jump enjoyed by those in the 40th percentile, which saw the highest growth.
The state or territory with the highest median income was the Australian Capital Territory at $1,550 per week, followed by the Northern Territory ($1,427), NSW and Western Australia (both $1,339).
Those with the lowest median income were South Australia ($1,200 per week), Tasmania ($1,210) and Victoria ($1,280).
The ABS found women’s median weekly earnings increased at a faster rate than men’s in the last five years, partly because the proportion of women working full-time increased.
Australians’ real wages increase
Other statistics also show Australians are doing better and, for the first time in years, Australians have seen their real wages increase.
The ABS’ latest Wage Price Index figures for the December quarter of 2023 found wages rose 4.2 per cent across the year.
It was the highest recorded annual growth since the March quarter 2009, which also saw a 4.2 per cent increase.
The 4.2 figure was slightly higher than inflation, which rose 4.1 per cent in 2023 — the first time since March 2021 that wages rose more than other household expenses did.
Average weekly earnings for those working full-time also increased, rising by 4.5 per cent to $1,888.80 in the year ending November 2021.
Changes to the Wage Price Index since December 2004. Source: SBS News
So why don’t we feel better off?
While wages are growing, Deloitte Access Economics partner and macroeconomist Stephen Smith said people’s money was not buying as much as before.
“If you’re going down to Woolworths or Coles, and prices are rising by more than (your wages) you’re going backwards in what we call ‘real terms’,” he said.
“That’s a big reason why, despite wage growth, people still feel like they’re going backwards.”
Wages are starting to catch up and Smith said economists were expecting real wage growth to continue but it was early days and people were probably not yet feeling the benefits.
Shoppers may not be feeling the benefits of wage growth in Australia yet. Source: AAP
“It’s going to take quite a long time, quite a number of quarters of positive growth before we’re back into the same level of real wages that we were before the pandemic or before the lift in inflation,” he said.
Inflation, which is measured by looking at the price of certain goods and services that households typically buy, is well down from its peak of 7.8 per cent in late 2022.
In recent years, it has been driven by factors such as restrictions on international shipping during the pandemic and increases in oil prices due to the Ukraine war.
It’s going to take quite a long time, quite a number of quarters of positive growth before we’re back into the same level of real wages that we were before the pandemic or before the lift in inflation
Stephen Smith, Deloitte Access Economics
But Smith said more recently it had been driven by other factors, like a shortage of housing, as well as the energy transition.
“We’re into what we hope is the tail end of that now. Some of those (factors) are likely to stick around, like the high growth in rent, but others have really sort of fallen away — like the pandemic effects — (they) are in the rear-view mirror.”
More money on the way for Australians
There will be some changes in the second half of this year that may take some of the pressure off household budgets.
The will come into effect from 1 July, giving every taxpayer in Australia some tax relief.
“There’s a few things that suggest there’s some relief on the way for households,” Smith said.
Source: SBS News / Kenneth Macleod
He said the Reserve Bank had previously been expected to lower interest rates towards the end of the year, although this may not happen now after .
The Fair Work Commission is also undertaking its , with a rise set to come into effect on 1 July.
Last year, the workplace umpire for more than 2.5 million workers, citing low unemployment, falling wages and high inflation.
The Albanese government has steered clear of recommending a specific percentage boost, asking that it “ensure real wages of Australia’s low-paid workers do not go backwards”.
The Australian Council of Trade Unions (ACTU) has called for a 5 per cent increase but the Australian Chamber of Commerce and Industry want it limited to no more than 2 per cent.
– Additional reporting by the Australian Associated Press
