As discussed in the ‘Price and Wage Developments’ chapter, wage growth in Australia has been very low, and lower than implied by its historical relationship with the unemployment rate. Wage growth is well below its decade average in all industries, and dispersion across industries is around its lowest level since the late 1990s when the wage price index (WPI) began (Graph B1 and Graph B2).
While wage growth is low in every industry, it is currently lowest in industries that are more exposed to the end of the mining investment boom, such as mining, construction and administrative & support services (which include labour hire companies that provide a range of workers – such as construction labourers, truck drivers and administrative assistants – to mining and mining-related firms). In addition, wage growth has been relatively weak in professional, scientific & technical services, and rental, hiring & real estate services, which also include firms that support the mining industry.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
