Australia sees strong growth in average weekly earnings
Average weekly earnings have seen their strongest growth since May 2013, according to new data from the Australian Bureau of Statistics (ABS). The increase is due to a rise in both wages and the number of people working full-time.
This is welcome news for many Australians struggling with rising living costs. The strong earnings growth will help significantly boost household budgets and stimulate the economy in this challenging period.
“The annual increase of 4.5 per cent, or $81 a week, was the strongest since May 2013, other than a brief spike in average earnings early in the COVID-19 pandemic,” said Bjorn Jarvis, ABS head of labour statistics.
“The recent rise in average earnings reflects strong wage growth, with the Wage Price Index rising by 4.2 per cent in the year to December quarter 2023. This was the highest annual increase in underlying wage growth since the March quarter 2009,” he added.
Despite the growth in earnings, it is important to note that the gains have not been evenly distributed. Some workers, such as those in casual or part-time roles, have not seen the same level of growth.
The gender pay gap has also narrowed, with women's earnings growing faster than men's. Jarvis added that this is already the third straight drop in the gender pay gap, reflecting stronger growth in average full-time earnings for women at 3.5% compared with 2.3% for men.
“The gender pay gap in average weekly ordinary full-time earnings, the most commonly cited of the gender pay gap measures, narrowed to 12%, down from 13% in May 2023 and the lowest level on record,” said Jarvis.
READ | How inequality drives Australia's cost of living crisis
The highest-paying industries
According to the ABS report, mining remained the highest-paying industry in November 2023, with employees’ average weekly earnings at $ 2,952. Males in this industry averaged $3,049 in 2023, higher than $2,569 for women.
Other high-paying industries include information media and telecommunications, professional and technical services, energy and gas, financial services, and public administration and safety – all in the range of $2,000 to $2,500 average weekly earnings.
Meanwhile, the lowest-paying industries include retail trade, accommodations, and food services.
Since 2020, the industry with the highest average weekly earnings growth has been the accommodation and food services space, which has seen a 20% increase. But this growth is mainly felt by men, who had a 19% increase in three years, compared to the women’s 9% increase.
The other industries that saw a huge jump in three years include information media and telecommunications, arts and recreation, and the rental, hiring, and real estate space, all growing at a 15% to 18% rate.
On the other hand, construction, manufacturing, education, transport, warehousing, financial and insurance services all saw below 10% increases from 2020 to 2023.
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Australian states with the highest pay
Western Australia and the Australian Capital Territory remain the states with the highest pay in weekly earnings at $2,108 and $2,088, respectively. Tasmania and South Australia, meanwhile, offer the lowest wages.
Western Australia saw the highest wage growth in three years at around 15%, followed by Queensland at around 14%. Meanwhile, Victoria, New South Wales, and the Northern Territory only registered below 10% growth from 2020.
Looking at the geographic aspect of the increase in average weekly earnings hints at the potential of the regions to attract and lure talent away from Australia's busy cities and urban areas.
While the positive trend in average weekly earnings holds promise for Australian workers, addressing remaining disparities and ensuring wage growth remains strong across a wider range of industries is crucial. Continued focus on these aspects will be key to maximising the benefits for the Australian economy and ensuring broader-based prosperity.