Temporary says SEEK, and for good reason.
WHAT IS CAUSING WAGES TO RISE NOW?
Just a few months ago the ASI appeared to have peaked and was slowing. That has now turned around, with the ASI up by 1.4% in the three months to August. The 0.4% m/m figure previously reported for July has now been revised up to 0.5%, and August followed with a further 0.5% growth.
Why has advertised salary growth picked up again after starting to ebb? The growth appears to be confined to only some industries, in particular Community Services & Development, which has experienced a relatively large increase in minimum rates of pay due to a Fair Work Commission decision.
Figure 3 shows growth in the ASI by industry for the top 10 industries.1 Community Services & Development stands out, with 8.0% growth in advertised salaries in the year to August. Most other large industries are seeing a slowing of ASI growth – for example, the Trades & Services industry experienced 5.5% growth in the year to August, down from a peak of 6.8% in the year to April 2023.
Notably, Hospitality & Tourism has seen a continued moderation in ASI growth, with advertised salaries up just 2.6% in the year to August. Hospitality is the industry in which the largest proportion of employees are paid according to an award.
Modest advertised salary growth has persisted in Hospitality despite the Fair Work Commission’s decision to lift award wages by 5.75% from July. This moderation in advertised salaries reflects a fall in labour demand in Hospitality from the very hot labour market experienced in 2022.
THE SUB-INDUSTRIES DRIVING GROWTH
Within the Community Services & Development industry, the rise in advertised salary growth appears to be confined to the Aged & Disability Support sub-industry, which experienced a rise of 8.9% in the year to August.
Other sub-industries, such as Employment Services and Community Development are seeing reasonably steady growth in advertised salaries, without the sharp increase in recent months experienced by Aged & Disability Support.
This lends weight to the view that the overall increases in ASI for Community Services & Development has been driven by the Fair Work Commission’s decision to increase aged care award wages by 15 per cent from 30 June for a range of key occupations.
The increase in ASI growth has not been broad-based. In the year to August, only 54% of the nearly 400 subindustries recorded by SEEK experienced advertised salary growth of 3% or greater, as shown in Figure 4. This has fallen from a peak of 70% of sub-industries in the year to June 2022, when the demand for labour was at its strongest, and has fallen reasonably steadily since that peak.
Given that the rise in ASI has been driven by only a portion of sub-industries, and that the greatest growth is due to a one-off increase in award wages, it would be reasonable to expect growth in the overall ASI to moderate again, now that the temporary effects of the one-off aged care wage increase have passed.
Good to see bedpan industries enjoying a wages lift. They did us proud during COVID.
