Female earnings growth outpaces males

From

Average weekly earnings

  • Wages lift: Average weekly ordinary time earnings (AWOTE) rose by 2.4 per cent in the year to May, unchanged from the annual growth rate in November. But the AWOTE for full-time adults lifted by 0.3 per cent to an annual growth rate of 2.7 per cent – the strongest growth rate in over three years.
  • Female wages strong: The female AWOTE rose by 3.4 per cent over the year to May, the strongest growth rate in two years. And the male AWOTE up 2.4 per cent, the best growth rate in 3½ years.
  • Industry wages: The average wage across Australia stands at $82,436. The highest average wage can be found in the Mining sector at $134,784 per year.
  • Wage winners: Wages rose most over the year in Administrative and Support Services (up 5.5 per cent), Manufacturing (up 5.0 per cent); and Arts & Recreational Services (up 4.6 per cent).
  • Wage losers: Wages were weakest over the past year in Construction (down 1.2 per cent), Health Care & Social Assistance (up 1.0 per cent), and Mining and Rental, Hiring & Real Estate Services (both up 1.6 per cent).

The dollar figures on wages are important in assessing the outlook for spending at consumer-focussed businesses.

What does it all mean?

  • Female participation in the workforce is near record highs at 60.4 per cent in July. And female wages are growing at a faster annual growth rate than males, up by 3.4 per cent over the year to May. It is the strongest growth rate in two years and the female wages as a proportion of male wages at 85.5 per cent is the best since the Bureau of Statistics data series began in November 1994.
  •  The assumption is that wages growth is glacial across Australia. But that seems to depend on where you live and what industry you work in. According to the latest average weekly earnings data (showing the dollar figures on wages), wages rose by 2.4 per cent over the past year, above the 2.1 per cent headline inflation rate. And for full-time adult ordinary time earners, the growth rate is even better at 2.7 per cent over the year to May.
  • And if you live in NSW, wages are growing at a 3.9 per cent annual rate. But if you live in South Australia, wages are flat over the year. If your job is an administration or support position, the data says that wages have lifted by 5.5 per cent over the past year.
  • Clearly the average earnings data has its problems. Wages are weaker in Construction (down 1.2 per cent) and lagging in Health Care (up by 1 per cent), which is at odds with the latest Wage Price Index data for the June quarter. And there can be compositional issues: movements from part-time to full-time; cashing out of bonuses; enterprise bargaining agreements; and different pay rises and agreements in private and public sectors can all affect the results.

What do the figures show?

Average Weekly Earnings:

  • Average weekly ordinary time earnings (AWOTE) rose by 2.4 per cent in the year to May, unchanged from the annual growth rate in November. But the AWOTE for full-time adults lifted by 0.3 per cent to an annual growth rate of 2.7 per cent – the strongest growth rate in over three years.
  • Female wages rose by 3.4 per cent over the year to May, the strongest growth rate in two years. And male wages were up 2.4 per cent, the best growth rate in 3½ years.
  • Average weekly total earnings for adults rose by 2.8 per cent over the year – the strongest growth rate since November 2014. And total earnings for all wage earners rose by 2.4 per cent over the year.
  • Across States & Territories over the year to May: NSW (up 3.9 per cent); Victoria (up 2.5 per cent); Queensland (up 3.1 per cent); South Australia (flat); Western Australia (up 1.5 per cent); Tasmania (up 1.9 per cent); Northern Territory (up 3.2 per cent); ACT (up 2.0 per cent).
  • The average wage in May 2018 was $82,436.
  • Across states & territories, we have calculated average annual wages as follows: NSW $83,517, Victoria $80,610, Queensland $80,304, South Australia $75,369, Western Australia $90,496, Tasmania $71,718, Northern Territory $86,762 and ACT $94,224.
  • Wages rose most over the year in Administrative and Support Services (up 5.5 per cent), Manufacturing (up 5.0 per cent); and Arts & Recreational Services (up 4.6 per cent).
  • Wages were weakest over the past year in Construction (down 1.2 per cent), Health Care & Social Assistance (up 1.0 per cent), and Mining and Rental, Hiring & Real Estate Services (both up 1.6 per cent).
  •  The highest average annual wage can still be found in the Mining sector at $134,784 per year. Next highest is Information Media & Telecommunications ($100,396), and Finance & Insurance services ($98,532).
  •  The lowest average annual wage is obtained by workers in the Accommodation and food services sector ($59,103), followed by Retail trade ($60,388), “Other services” ($64,412) and Manufacturing ($72,545).
  • Why is the data important?

  • The ABS publishes the Average Weekly Earnings (AWE) series on a six-monthly basis. While the Wage Cost Index allows analysis of wage movements from quarter-to-quarter, the AWE series is best seen as a measure of actual dollar figures for wages. But average weekly earnings figures can be distorted by changes such as the relative growth of high-paid to low-paid jobs and the cashing out of bonuses in ordinary earnings.

What are the implications?

  • The Reserve Bank has noted that there are pockets of strength in the job market and this is being reflected in higher wages. The latest average weekly earnings data show that 12 of 18 industry sectors have wage rates growing at a faster pace than the economy-wide average. The Reserve Bank is expected to remain patient on interest rates as wages growth gradually picks up and inflationary pressures build.

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