The latest Trends in Federal Enterprise Agreements show that workers still have a long way to go to regain the lost value of their wages.

The average annual wage growth in enterprise agreements approved in the June quarter this year was 3.8%, up just 0.1%pt from the 3.7% average growth of agreements approved in January, February and March. The increase was all due to the public sector, which saw a jump from 3.2% to 3.7%, while the average growth among private sector agreements remained steady at 3.9%.

Once again the figures demonstrate that there has been no wage breakout, and that when you consider the average wage growth of all current agreements is just 2.8%, most workers are still seeing their living standards decline.

The changes to industrial relations in the Fair Work Amendment (Secure Jobs, Better Pay) Act that was enacted last year, which included new rules regarding notice of expired Enterprise agreements and compulsion on employers to bargain, and the expansion of multi-employer bargaining only came into effect in early June and thus have no significant impact on these latest figures.

The data also reveals just how necessary were the reforms to the bargaining system. In the June quarter, there were just 938 agreements approved – among the lowest in the past 25 years. We know that the number of agreements and the number of employees covered by agreements is positively associated with stronger wage growth. The reason business groups have railed against the changes in the Secure Jobs, Better Pay Act is not that they believe it will affect output or productivity, but that it will see workers with more power to negotiate for a fairer outcomes.

The latest figures demonstrate that not only have workers not been the cause of inflation over the past two years, but even now as they attempt to recover some of the lost value of their wages due to the profit-led inflation since the start of 2022 they continue to receive wage growth that is consistent with inflation within the Reserve Bank’s target range. The data gives just more evidence to the Reserve Bank that they should not raise interest rates next week and they should cease spreading any concerns about blaming workers for keeping prices rising