The latest fortnightly release of enterprise bargaining agreements from the Fair Work Commission shows that wage growth is not picking up as it should.
In the fortnight to 9 September, non-union back agreements, covering 25,968 employees, had an average annual wage increase of just 2.4%. On average these agreements were set to last 4 years. Given the Reserve Bank expects inflation to grow well above 3% out to the end of 2024, this would represent a significant fall in real wages for the employees.
The previous 4 surveys showed some signs of increasing wage growth. But while agreements in the fortnight to 26 August had an average wage growth of 3.3% they covered only 9,802 employees. This latest release signals a real setback for hopes that wages are about to grow at a level commensurate with the current tight labour market. With unemployment at 3.5%, annual wage growth should at least be around 4%.
Once again however union-back agreements are delivering better outcomes for workers. But even here we see the agreements lodged in the latest fortnight had annual wage growth of just 3.5%. While this is better than an agreement not back by unions, it highlights the difficulties for workers to get positive outcomes even when supported by unions.
The current industrial relations system is completely geared towards keeping wages down. With prices rising by over 6%, this is resulting in massive falls in the living standards of workers as their wages are failing to keep up with, let alone surpass, inflation.
The data shows that wages continue to be deflationary and have nothing to do with the current inflation spike, but that workers are the ones expected to suffer in order to get inflation back within the Reserve Bank’s target of 2% to 3%.