‘Noose around your neck’: ATO data reveals Australian jobs with the biggest pay rises

New data has revealed the Aussie jobs sailing through the cost of living crisis thanks to massive pay jumps – and those that actually went backwards.

ANALYSIS

Who was best placed to handle inflation when it hit?

Some Australians got massive pay rises recently, far higher than inflation.

Some got small pay rises that look negative after you adjust them for inflation.

And others literally went backwards, even without adjustment.

The ATO just put out its latest taxation statistics that lets us examine the pay of every profession in Australia. I sliced it and diced it to find the occupations with the biggest pay jumps.

The following graph shows the story.

Who was best placed to handle inflation? Picture: iStock

Most jobs got small pay rises. The horizontal line on the charts show inflation for 2020-21 (orange) and 2021-22 (red). If the pay rise is lower than those lines, it means their pay rise wouldn’t be enough to keep up with inflation.

We need to talk about financial dealers. They got a 25 per cent pay rise. Markets went crazy in 2020-21 and finance types had a very, very good year. Stock markets went up as much as 30 per cent.

Already the second-highest paid profession, financial dealers obviously got GIANT bonuses. It goes to show that they don’t get paid for what they do, they get paid for what markets do. (Or at least that’s true in good years).

If your neighbour is a stockbroker or a bond trader and you hear him complaining about inflation, they’re just trying to fit in, they have no idea what the words actually mean.

Some jobs zoomed ahead – while some went backwards.

This data covers the 2020-21 financial year, the period of July 1, 2020 to June 30, 2021. The reason the latest data covers this period is because the ATO is slow to put out data. Still, that was exactly when inflation began to pick up.

At first, the theory was the inflation would be brief. Just a bit of post-pandemic disruption to supply chains. But of course, now the supply chains are humming again – and the inflation is still with us.

Inflation was 3.8 per cent in the 2020-21 financial year, 6.1 per cent in the 2021-22 financial year and when we eventually get the numbers for this year, it will probably be higher still.

Professions that got a tidy pay rise on the eve of the inflation breakout were in a much better position to handle the price pain that followed.

If you’re a crop farm worker (19 per cent pay rise) or a dental practitioner (11 per cent pay rise), you came into this mess with a very nice pay rise and sure, for you, the rising price of eggs is annoying. But it’s probably not a disaster.

But if you’re a pilot (19 per cent pay cut) or a cleaner (0.5 per cent pay cut), your situation is much worse. The rising price of rent, groceries and fuel probably feel like a noose around your neck.

Pay v pay rise

Of course, pay rises aren’t the only thing that makes people comfortable. It’s the amount of pay too.

This next chart shows both. On the vertical axis is the average salary of various professions, and on the horizontal axis is how much their pay rose that year compared to the previous one.

Of course, pay rises aren’t the only thing that makes people comfortable.

The biggest pay rises went to some of the most lowly professions, like waiters and massage therapists. Crop farm workers went well too, as the price of wheat rose sharply and as the supply of foreign workers fell.

Pilots and aircraft mechanics had a shocking year because of course the airline industry was profoundly disrupted by Covid lockdowns.

Sportspeople also had a bad year, accepting Covid-driven pay cuts. They have bounced back since, while some other types of jobs are in more of a long-term downward spiral.

Printers are probably not in a booming industry. Nor are “window dressers” – the people who arrange things in shop windows. Both of those are getting eaten up by the internet.

The reality is that some of us are much more cushioned from inflation than others. Even if an anaesthetist did take a pay cut, they’d have plenty of ability to fill their car with fuel (although they probably have a Tesla in their garage so they don’t worry about petrol). However, for the great bulk of us who are getting a modest pay rise on an average salary and seeing our buying power go backward, inflation really matters.

Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.