Last week, the ABS released average weekly earnings data, which revealed that real earnings were flat (0% change) in the year to November 2016 and have fallen by 2.1% since May 2013 (see below charts).
On Monday, the ABS released aggregate salaries and wages data, which feeds into the national accounts, which revealed that total wages and salaries across the economy grew by only 0.2% in the December quarter in trend terms – the lowest quarterly rate of growth in the post-GFC period:
Whereas wages and salaries grew by just 1.5% in the 2016 calendar year – the lowest annual growth recorded in the post-GFC period:
The below charts show aggregate annual wages and salaries growth across Australia’s states and territories:
As you can see, total wages and salaries growth was positive in 2016 in the ACT (+11.8%), VIC (+6.1%), NSW (+2.5%) and the NT (+1.4%) and negative in WA (-4.9%), SA (-3.8%), TAS (-2.0%), and QLD (-0.6%).
One significant shortcoming of this release is that it only presents total wages and salaries in nominal (current dollar) terms.
In the next chart, I have deflated the aggregate series first by both population growth only and then also by CPI, thus giving wages and salaries growth in real per capita terms:
As shown above, nominal wages and salaries recorded zero growth in per capita terms in 2016, whereas they actually went backwards by 1.5% in real per capita terms.
The below charts plot real per capita wages and salaries across Australia jurisdictions:
As you can see, real per capita wages went backwards in 2016 everywhere except VIC, the ACT and the NT. The situation is worst in WA, where wages and salaries fell by around 6% in real per capita terms.
While the boost in commodity prices may have driven a strong rebound in national disposable income, this unfortunately has not been felt by the typical Australian worker, whose remuneration continues to slide backwards when adjusted for inflation.
