Ahead of the June quarter Wage Price Index data out tomorrow, the latest figures on wage growth in enterprise agreements shows few signs of wage growth that is unsustainable over the long-run.

In the fortnight to 14 July, the average annual wage growth of the 165 enterprise agreements lodged with the Fair Work Commission covering some 83,595 employees, was just 3.1% and the weighted average over the past three months is a slightly better 3.4%.

This would be considered low even during times of average inflation growth, let alone during a period when inflation has been consistently rising at twice the pace of Reserve Bank’s target ceiling of 3%.

The largest agreements in this fortnight were in the educational sector with 7 agreements covering 50,630 employees having an average wage growth of just 2.7% covering an average of 3.8 years.

The relatively low wage growth during this period of high inflation shows that workers remain the biggest losers from rising prices. There is no sense of labour costs being the main driver of inflation and even more clear is that workers are agreeing to wage growth that will assist the return of inflation to within the RBA’s target range.

The industrial relations landscape remains strongly weighted towards employers, as workers struggle to achieve wage increases that will even see real wages grow over the next 3 years, let alone recover the loss in purchasing power from the past 3 years.

Tomorrow’s wage price index figures will likely show the strongest wage growth for more than 10 years. But this should not be read as a sign that wages are breaking out, or that workers are demanding unrealistic or economically damaging wage rises. The reality is companies have been the winners out of the inflation of the past 2 years because profits were the main contributor. Workers now deserve to recover their lost living standards, but the enterprise agreements data shows that far from being greedy – workers are displaying much more restraint than companies did when they used the war in Ukraine and supply-side bottleneck after the pandemic as cover to increase their profits.