Why Australian wages grew at slowest pace in December quarter

February 24, 2021 03:18 PM AEDT | By Ashish

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Why Australian wages grew at slowest pace in December quarter

The phased implementation of the Fair Work Commission annual wage review also had a small positive impact on wages, said Michelle Marquardt, Head of Prices Statistics, ABS. The annual wage growth weakened to 1.4 per cent, a record low rate for the second quarter in a row.

Wage growth by sector

While the private sector wages rose by 0.5 per cent, the public sector grew by 0.3 per cent in December quarter 2020.

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Wage growth by industry

The Professional, Scientific and Technical services industry reported the largest quarterly rise (1.2 per cent) in wages compared to a contraction of 0.5 per cent in June. The annual wage growth to the December quarter 2020 stood at 0.3 per cent for the Accommodation and Food services industry, while the Education and Training industry wages grew at 2.4 per cent.

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States and territories

The highest quarterly rise was recorded for Victoria (0.7 per cent). The Northern Territory also reported a quarterly rise of 0.7 per cent.

Meanwhile, the Reserve Bank of Australia (RBA) cut interest rates three times last year to 0.1 per cent. The central bank also launched quantitative easing to ease borrowing costs for the customers and boost inflation and economic growth. It would take extended tightening of the labour market to bring the wages and inflation to the comfortable levels.

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