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Australian workers are still stuck with the lowest level of wages growth in at least two decades, as pay packets increased an average of just 1.9 per cent last financial year.
That is the same annual increase that was recorded for the three months to March, and only just matches the current level of cost of living increases, as measured by the consumer price index.
The Bureau of Statistics wage price index showed a 0.5 per cent average increase in wages over the June quarter and the ABS observed that quarterly pay rises have been stuck near that level for the past three years.
ABS chief economist Bruce Hockman said that, even though unemployment was not particularly high at 5.6 per cent, underemployment was rife and weighing on pay demands.
"This low wages growth reflects, in part, ongoing spare capacity in the labour market," he wrote in the report.
"Underemployment, in particular, is an indicator of labour market spare capacity and a key contributor to ongoing low wages growth."
Callam Pickering, the Asia-Pacific economist for global job site Indeed, said wage growth was lagging other more positive labour market data.
"Although other measures of the labour market have improved, including employment and job vacancies, wage growth remains at a level that we haven't seen since our last recession a quarter century ago," he observed.
Private sector lags public on health, education
The news was worse for those working in the private sector, despite Commonwealth public service enterprise bargaining disputes that have left many federal public servants without a pay rise for several years.
Private sector wages rose a paltry 1.8 per cent over the past year, while public servants saw an average 2.4 per cent pay rise.
The public sector pay increases were boosted by health care and social assistance, which was the sector with the highest pay rises, averaging 2.6 per cent.
Education and training was the sector with the next highest average pay increase, also boosting public sector wages.
The mining sector continued to languish, with pay up only 1.1 per cent.
That was reflected in the state figures, which showed Western Australians continued to have the lowest pay increases of just 1.4 per cent, while South Australians and Northern Territorians saw an annual 2.1 per cent wage gain.
'Good indications' wage growth has bottomed
Persistent low wage growth has been concerning economic policymakers, due to its likely negative impact on consumer spending and the difficult it creates for households in keeping up their debt repayments.
Most economists tipped the weak result, but Callam Pickering said it would still disappoint policymakers hoping for a pick-up, such as the Reserve Bank.
"The latest data, while not unexpected, suggests that wage growth is still some way off breaking out of its slump," he noted.
"It also indicates that conditions will remain difficult for Australian retailers over the remainder of the year."
However, CommSec's Craig James said there are some early signs that wage growth may soon improve.
"Has wage growth bottomed? There are good indications to suggest that it has," he wrote in a note.
"Including bonuses, wage growth lifted in the June quarter at the fastest rate in seven years.
"And the Reserve Bank noted yesterday that its chats with businesses had revealed stronger demand for some skilled workers.
"If the job market continues to improve as expected then wages should also start to trend higher."
Topics: economic-trends, industrial-relations, work, unemployment, australia
First posted