A new YouGov survey of 357 business leaders showed that 47% of all Australian businesses are foregoing yearly wage increases, while around one-third said they would grant a merit-based pay increase.
Nearly 40% of businesses surveyed said they are considering laying off up to 20% of their workforce. Of these, 11% said they would lay off 20% or more, 15% said they would lay off 10% to 15%, and 12% said they would lay off up to 10%.
The survey was commissioned by tech HR platform Deel.
The survey follows this week’s shock loss of 4,300 jobs across the economy in April, alongside the softer than expected wage growth over the March quarter.
AMP’s Jobs Leading Indicator for Australia (based on job vacancies, job ads and hiring plans) points to a further slowing in jobs growth ahead:
Source: Shane Oliver (AMP Capital)
While the Melbourne Institute suggests that the share of people receiving pay rises is narrowing, which is consistent with the survey above:
Source: Alex Joiner (IFM Investors)
All of this is occurring on the back of the sharpest rise in labour supply (immigration) in this nation’s history, which is already seeing the number of unemployed rise as jobs growth fails to match the increase in workers:
Source: Alex Joiner (IFM Investors)
Running the largest immigration program in this nation’s history – with 715,000 net overseas migrants forecast to land in Australia in the two years to 2023-24 – is a bad idea when the economy is slowing on the back of the Reserve Bank’s ultra aggressive interest rate hikes.
Ramping up labour supply into falling demand is a recipe for higher unemployment and softer wage growth.
