Wages are growing at their fastest rate in 11 years – and there are three main reasons.
The Australian Bureau of Statistics (ABS) has reported that wages in the March quarter rose 3.7% on an annualised basis, the largest since 2012.
The ABS’s acting head of prices statistics, Leigh Merrington, said rising wages growth was being caused by “low unemployment, a tight labour market and high inflation”.
Unfortunately, though, while wages are rising, productivity is falling, Reserve Bank of Australia governor Philip Lowe revealed in a recent speech.
“Indeed, the level of output per hour worked in Australia today is the same as it was in late 2019. This means there has been no net growth in productivity since then. The reasons for this are not well understood.” he said.
“It is possible that with the pandemic now behind us, productivity growth will pick up. Advances in science and technology, including increased digitisation and the use of artificial intelligence, could also help. So too could further improvements in the way that services are delivered as well as reforms to public policy. But there is considerable uncertainty here.”
