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Australian workers claw back hit to living standards as wages outpace inflation Australian workers claw back hit to living standards as wages outpace inflation
(32 minutes later)
The 1% climb in real pay was the fastest in five years, and twice the five-year average leading into the pandemicThe 1% climb in real pay was the fastest in five years, and twice the five-year average leading into the pandemic
Australian workers are clawing back the hit to their living standards from the high cost of living, as wages handily outpaced inflation in the year to March.Australian workers are clawing back the hit to their living standards from the high cost of living, as wages handily outpaced inflation in the year to March.
Hourly rates of pay climbed by 3.4% through the 12-month period, versus a 2.4% rise in prices, according to the Australian Bureau of Statistics.Hourly rates of pay climbed by 3.4% through the 12-month period, versus a 2.4% rise in prices, according to the Australian Bureau of Statistics.
That 1% climb in real pay was the fastest in five years, and twice the five-year average leading into the pandemic, the quarterly wage price index data showed.That 1% climb in real pay was the fastest in five years, and twice the five-year average leading into the pandemic, the quarterly wage price index data showed.
Fresh from a resounding victory at the 3 May election, Jim Chalmers on Wednesday claimed credit for the turnaround in Australians’ real pay, even as he said “we know we’ve still got work to do”.Fresh from a resounding victory at the 3 May election, Jim Chalmers on Wednesday claimed credit for the turnaround in Australians’ real pay, even as he said “we know we’ve still got work to do”.
“People are under pressure and the global environment is really uncertain,” Chalmers told reporters.“People are under pressure and the global environment is really uncertain,” Chalmers told reporters.
“The best defence against that global economic uncertainty is decent pay, tax cuts for workers, making our economy more resilient at the same time as we help people with the cost of living. And we have always seen decent wages growth as part of the solution to cost of living challenges, not part of the problem,” he said. “The best defence against that global economic uncertainty is decent pay, tax cuts for workers, making our economy more resilient at the same time as we help people with the cost of living. And we have always seen decent wages growth as part of the solution to cost-of-living challenges, not part of the problem,” he said.
New public sector enterprise agreements by the states, increases to eligible aged care workers, and the childcare retention payment all helped pay rates grow faster in the public sector (3.6%) in the year to March than in the private sector (3.3%). New public sector enterprise agreements by the states, pay increases to eligible aged care workers, and the childcare retention payment all helped pay rates grow faster in the public sector (3.6%) in the year to March than in the private sector (3.3%).
Despite a slightly stronger-than-anticipated lift to wages in the first three months of 2025, economists said the growth remained in line with the Reserve Bank of Australia’s expectations and would not dissuade the bank from cutting rates next Tuesday. Despite a slightly stronger than anticipated lift to wages in the first three months of 2025, economists said the growth remained in line with the Reserve Bank of Australia’s expectations and would not dissuade the bank from cutting rates next Tuesday.
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The recently returned Albanese government as a first order of business will argue in favour of an above-inflation increase to the minimum wage, ahead of the Fair Work Commission’s annual determination.The recently returned Albanese government as a first order of business will argue in favour of an above-inflation increase to the minimum wage, ahead of the Fair Work Commission’s annual determination.
With a decision due in the coming weeks, unions are arguing for a rise of 4.5%, while business groups, such as the Australian Chamber of Commerce and Industry, are making the case for a rise of about 2.5%.With a decision due in the coming weeks, unions are arguing for a rise of 4.5%, while business groups, such as the Australian Chamber of Commerce and Industry, are making the case for a rise of about 2.5%.
Amanda Rishworth, the newly appointed employment and workplace relations minister, said the submission to the commission, due by Friday, would advocate for an “economically sustainable” increase that will “provide further relief to lower income workers who continue to face cost of living pressures”. Amanda Rishworth, the newly appointed employment and workplace relations minister, said the submission to the commission, due by Friday, would advocate for an “economically sustainable” increase that will “provide further relief to lower income workers who continue to face cost-of-living pressures”.
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While the wage price index suggests a solid increase in real incomes, the index represents a useful but narrow picture of the change in the rates of pay for a basket of jobs.While the wage price index suggests a solid increase in real incomes, the index represents a useful but narrow picture of the change in the rates of pay for a basket of jobs.
The scale of that broader fall in living standards in a global context was revealed in a new OECD report, which showed average Australian real household disposable incomes fell by 1.1% last year, marking the third straight year of declines.The scale of that broader fall in living standards in a global context was revealed in a new OECD report, which showed average Australian real household disposable incomes fell by 1.1% last year, marking the third straight year of declines.
As was the case in 2023, it was the worst result of the countries analysed by the Paris-based organisation.As was the case in 2023, it was the worst result of the countries analysed by the Paris-based organisation.
Among 20 countries in 2024, only Finnish households also suffered a drop in disposable incomes last year. Among 20 countries in 2024, Finland was the only other country where households also suffered a drop in disposable incomes last year.
Living standards have, however, started to recover over the second half of 2024, the data showed. Living standards had, however, started to recover over the second half of 2024, the data showed.