Australia ranks seventh in a recent study that examined incomes from across the world to find where average salaries and wages are the highest.
Switzerland has the highest global average wage, according to Tipalti, at $91,852. Because it has long been a centre for international banking, it is well-known for being an expensive area to live with matching incomes. This city also attracts international investment. Iceland has the world’s second-highest average pay, at $81,844. Iceland is another example of a country with a high cost of living, high standard of living, and high salaries.
The average wage in Australia in 2021 was $57,798. According to Xero statistics, construction and manufacturing recorded the highest rates of pay increase in September 2022. Healthcare and social support continued to have the poorest year-on-year growth (+3.4percent y/y).
Wage growth varied little among states, ranging from 4.3 per cent y/y in Western Australia to 4.8 per cent y/y in the Australian Capital Territory, Tasmania, and Victoria. Let us now compare these figures to the 7.3 per cent rate of consumer price growth during the same period.
“Wages in Australia have been slower to respond to tight labour markets than New However, the past two months have seen a noticeable acceleration in Zealand and the United Kingdom. This is a positive sign for small business staff, and suggests the economy is slowly starting to respond to the record low unemployment rates,” says Louise Southall, Economist, Xero.
The question is, is it enough?
The Wage Price Index rose 3.1 per cent annually, according to the latest data from the Australian Bureau of Statistics (ABS). This is the highest quarterly growth in hourly wages recorded since the March quarter of 2012. In seasonally adjusted terms, this growth was primarily driven by increases in wages for the private sector, which grew at twice the rate of wages in the public sector.
Why aren’t wages keeping up?
The WPI data, which the ABS, includes sizeable pay increases for minimum wage and award-dependent workers, but average salaries are still declining by 4.2 per cent due to high inflation and persistently weak wage growth in the rest of the economy. The most recent batch of wage growth data had previously set the record for all-time real wage reductions, but this surpasses it.
The Secure Jobs, Better Pay Bill’s changes to our bargaining system, which will allow millions of workers across the economy to secure their first pay raises in a decade, are urgently needed, according to the Australian Council of Trade Unions. These figures, according to ACTU Assistant Secretary Liam O’Brien, demonstrate the limitations of what a dysfunctional system is capable of.
“Even with historic wage rises flowing through this quarter to minimum and award-dependent workers, everyone is still going backwards, at an average of 4.2 per cent.
“To get pay rises across the economy, we need to make bargaining more accessible in more workplaces. The Secure Jobs, Better Pay Bill, is a critical step towards achieving that goal, and the faster it becomes law, the faster Australian workers will see the benefits.
“Big businesses are campaigning against the Bill because they will never support wage rises for working people. They are fighting to protect this system, which sees massive pay cuts for working people, while profits and executive pay continue to set new records.”
Marcus Lasarow, CEO of Cashd said: “With soaring inflation and, in turn, the continuous rise of the cost of living, wages have not increased in line with this exposure, workers are cornered into covering the shortfall, which is not in their budget nor accounted for, workers are falling into severe credit, and debt traps given this shortfall.
“The absolute need for employers to embrace real-time remuneration is critical in supporting workers to instantly gain access to their earned pay without the burden of heavy costs.”
Inflationary pressures
All four sub-metrics of the Xero SME Index led to the index’s 13-point decline to 115 points in October (sales, wages, jobs and time to be paid). While September saw the largest wage increase since the series began in January 2017 (+4.8%y/y), wages slowed to a rise of 4.2 per cent y/y in October.
However, Will Buckley, Country Manager, Xero Australia, remains optimistic. “While the October data is softer than previous months, it’s important to note that the Index remains above the long-term averages.
“There’s no doubt the rising cost of living – driven by inflationary pressures – is challenging
Australians across the country, many consumers are being forced to re-examine purchases and reduce discretionary spending. This means customers are left with less to spend at local small businesses. Despite this, it is promising that small businesses still have the confidence to hire new employees.”
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