White-collar wages moderated in the December quarter

Witness workers in mining, utilities, transportation, finance and insurance, and health care, all below 2% for the year.

However, with the national unemployment rate at a 13-year low of 4.2% and on its way to a 48-year low below 4%, as well as job vacancies at record highs, there are signs that the Wage pressures are building up in the economy.

“The proportion of wage increases reported in the December quarter was higher than usual at this time of year,” said Michelle Marquardt, head of prices at the Australian Bureau of Statistics.

“Wage pressure has continued to build… for jobs with specific skills. Private sector wage growth has occurred across a wide range of industries as companies seek to retain experienced staff and attract new hires.

Cloud accounting provider Xero’s Small Business Index showed wages rose 3.4% year-on-year in January, from 2.5% in December. Similar to ABS data, data from Xero, which covers thousands of small business users, showed that hospitality salaries have increased by 4.9% annually.

“The increase in hospitality wages is a direct reflection of the shortage of overseas staff on which this sector normally relies heavily,” said Xero chief economist Louise Southall.

“As the borders gradually open, we expect to see these numbers stabilize over the course of the year as smaller businesses gain access to more workers.”

The owners of the restaurant and pasta retailer Carlton Al Dente, Andrea Vignali and Davide Bonadiman, and the director of operations Michelle Badek know only too well the fierce competition for workers in recent months.

Founded in March 2020 as a pasta seller during the first national lockdown, the pandemic failed to stem the rise of Al Dente, and the now popular Melbourne restaurant opened in April the following year .

But while a core team of full-time staff have stuck with the burgeoning restaurant, Ms Badek said competition for staff meant competitors regularly tried to poach people and power dynamics had exchange.

“Before, it was employees trying to find a job. The tables have definitely turned, and we have definitely seen that we are the most eager to find and retain qualified personnel,” she said.

Mr Vignali said that while the biggest cost to the business was its staff, the payroll had remained stable as existing staff or management would step in and do the work themselves to fill in the gaps.

The trio’s story mirrors the recent NAB Business Survey for the December quarter, which showed that 85% of businesses reporting staff shortages were hampering their ability to operate at full capacity.

Unions have said they will push for pay rises of at least 3% in negotiations this year, but Australian Chamber of Commerce and Industry chief executive Andrew McKellar has warned against the going too far.

“At the next annual wage review, any push for unsustainable wage growth would likely jeopardize the viability of businesses and the jobs they maintain and create,” McKellar said.

“The reality is that our productivity performance remains a concern. Until we improve our economic efficiency, we will not see the stable and sustainable increase in wages that the community expects.

Labor shadow treasurer Jim Chalmers used the data to highlight the gap between 2.3 per cent wage growth and 3.5 per cent headline inflation to hammer Labor’s campaign rhetoric on the cost of life.

“Australians are increasingly worried about their wages and the recovery as the costs of basic necessities like petrol, rent and childcare soar while their real wages continue to fall,” he said. said Mr. Chalmers.

The RBA wants to see annual wage growth of around 3% to ensure that inflation is “sustainably” within its target range of 2-3%.

With core inflation hitting 2.6% in the December quarter and set to pick up in the coming months, wage growth is seen as the last hurdle before the RBA starts raising the rate of inflation. record cash of 0.1%.

The financial markets are rocking, which will happen as early as June, with at least four rate hikes during the second half of the year. Some economists are also predicting a series of rate hikes early in the new fiscal year.

While acknowledging that rate hikes later this year were “plausible” – which the bank called “highly unlikely” just a few months ago – Dr Lowe said earlier this month that the bank was ready to be “patient”.

Dr Lowe was skeptical that Australia’s wage-setting processes would quickly deliver the level of growth the bank was seeking.

Elizabeth J. Harless