Ultra-low unemployment is so far failing to deliver the wage increases most workers desperately need to cope with soaring inflation and cost-of-living pressures. | swrighteconomy
Employment Minister Tony Burke has cast doubt on the ability of the nation’s industrial relations system to deliver real wage growth despite figures showing the jobless rate falling to a 48-year low of 3.4 per cent.
While the unemployment rate dropped 0.1 percentage points in July – to its lowest level since mid-1974 – separate Australian Bureau of Statistics figures showed that despite the tight jobs market, wages are falling well behind the current 6.1 per cent rate of inflation. He said in 2008, when the jobless rate fell to 4 per cent and the participation rate was lower than it is today, wages were growing at 4.2 per cent.
The ABS said some weakness in wages might be due to the large number of people coming back into low-paying occupations such as hospitality or retail. Hospitality has the lowest full-time average incomes at $1220 a week compared to mining, the best-paid sector, where the average is $2701 a week. The ABS attributed some of the fall to weather conditions on the east coast, along with COVID-19 and influenza-related absences from workforces. Economists also believe casual workers are taking extra days off to care for sick children and relatives.
The Reserve Bank has previously said its ultra-low interest rate settings would drive down the jobless rate to a point it would force employers to deliver larger pay rises to staff.
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