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Over the last three months of 2020, a stronger-than-expected rise in private sector wages has held wage growth above (very low) economic forecasts, as many bosses have reversed COVID pay cuts or freezes.

Over the last three months of last year, the pay packages of Australians rose an average of 0.6 percent, twice the 0.3 percent predicted by most economists.

But many Australians are falling behind, particularly those dependent on awards for pay rises and public servants whose salaries have been frozen by governments.

For 11 years, Kylie Gray has been employed in the early childhood sector in Melbourne.

She said that the rise in the annual award rate did not keep up with the cost of living at the time.

“It’s generally only ever something under about a $1 increase per hour,” she said.

“As we all know, rent, food, expenses, they have skyrocketed and there’s no way my wage has kept up with that.”

The mother of three teenagers is currently studying in her profession for a higher degree, but she said her opportunity to raise pay would be limited even after she has earned her diploma.

“It means you end up sacrificing things, whether it’s going out, holidays or buying your own house and just having a safety net of savings,” she said.

“I’m living paycheque to paycheque.”

Ms Gray, however, is in the comparatively lucky group of award staff who, on the regular date of July 1 last year, received their 1.75 percent annual pay rise.

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Many employees in those sectors perceived to be most affected by the pandemic, including those working in hospitality, arts and entertainment, aviation, retail and tourism, have only just earned theirs since 1 February.

Wage growth over the year stayed at a record low of 1.4%, and the head of price statistics for the ABS, Michelle Marquardt, said that the result was lifted amid a range of one-off factors.

“December quarter’s moderate growth was influenced by businesses rolling back short-term wage reductions, returning wages to pre-COVID levels,” she noted.

“The phased implementation of the Fair Work Commission annual wage review also had a small positive impact on wages.”

Unusually, with wage growth of 0.7 percent, the private sector led wage increases over the quarter, seasonally adjusted, while public sector salaries were just 0.3 percent higher.

“Wage freezes have had an impact on the public sector, which recorded its lowest annual increase (1.6 per cent) since the commencement of the series,” Ms Marquardt said.

She clarified that the regions and industries recovering from pay cuts had the highest figures for the December quarter, with vocational, science and technological staff booking a rise of 1.2 percent in the June quarter having experienced a half-percent decrease in salaries.

The strongest December quarter wage growth of 0.7 percent was reported by Victoria, which reopened after a second lockdown.

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