The Employment Heroes SME Index put the average hourly rate of Australian SMEs at $34.45 in August – up 1.8% for the month and 8.6% for the year.
SMEs in every state and territory reported large annual wage increases – from 5.6 percent in NSW to 10.6 percent in Queensland. The industries with the largest annual salary increases were science, information and communications technology (11.7 percent), and healthcare and community services (8.4 percent).
‘Wage Breakout’
The pay increases are much larger than those reported by the ABS, which uses seasonally adjusted data.
But Callam Pickering, Asia-Pacific economist at Indeed, said ABS numbers for the June quarter showed signs of a “wage breakout” beyond the 2.6 percent wage increase — wage pressures he expects to pick up in the next six years will spread to the economy months.
“Workers will start pushing for higher wages, unions will start pushing for higher wages and that will lead to wage growth that we haven’t seen since the global financial crisis,” Mr Pickering said.
He said The Australian Financial Report The average pay increase among the 14 percent of workers who received a pay rise in the June quarter was 3.8 percent — the highest average increase since June 2012.
He said the proportion of workers set to receive wage increases in the September quarter would rise closer to 40 percent as many negotiate their wages after the fiscal year ends, suggesting wage growth in the September quarter was likely to exceed 3 percent.
Alexi Boyd, chief executive of the Council of Small Business, said some companies in the fintech industry have offered raises of up to 30 percent to attract enough employees to meet demand.
Meanwhile, Peter Burn, chief policy adviser to the national employers’ association Ai Group, said the average level of actual wage increases reported in the WPI in the June quarter is consistent with anecdotal reports from employers that they are raising wages well above headlines reported by the ABS .
“Considering that many of the pay increases received in the June quarter would have been set out in company agreements negotiated some time ago when inflation was lower, the 3.8 percent average suggests a large increase in recently negotiated pay increases,” he said.
The Employment Hero index also showed that Australian SMEs failed to increase their overall headcount in August – fueling suspicions that the unemployment rate may have bottomed.
Reserve Bank Governor Philip Lowe told the House Standing Committee on Economic Affairs on Friday that widespread labor shortages made it unlikely the national economy could sustain an unemployment rate of just 3.5 percent.
