How the coronavirus pandemic changed wages in Australia

Wages and jobs are starting to bounce back in Australia a year after the first cases were discovered – so how has COVID impacted our pay packets?

Australia is beginning to recover from the impacts of the coronavirus pandemic but figures reveal how wages have been impacted, a year since the crisis began.

The first case of COVID-19 was identified in Victoria on January 25, 2020, and as more cases were discovered, Australia closed its borders to international arrivals on March 20, with many states choosing to introduce lockdowns or place restrictions on residents, sending the country’s economy into a spin.

Almost one year on, this week there were promising figures showing the country’s economy was bouncing back, with 3.1 per cent growth in gross domestic product (GDP) in the last three months of 2020.

But the story of wage growth is a bit more complicated.

Australian Bureau of Statistics (ABS) figures released last month revealed full-time workers earned on average $1711.60 a week (before tax) in November 2020.

This is actually $53.20 higher than the same period a year ago – but the figure is not as promising as it seems.

ABS head of labour statistics Bjorn Jarvis told news.com.au the 3.2 per cent increase reflects the loss of many low-paid jobs, which sends the average higher.

Average Weekly Earnings do not survey individual workers and track how their wages change over time, for that we look at the Wage Price Index.

The index tracks changes in a similar way to the Consumer Price Index (CPI), which calculates cost of living increases by looking at the cost of the same basket of groceries.

The index, released the week before, showed wages increased by just 1.4 per cent between December 2019 and December 2020.

“That’s the lowest it’s been since we began measuring the Wage Price Index in the late 1990s, so it’s at its lowest point in 20 years,” Mr Jarvis said.

The index also revealed which employees were seeing the most wage growth and those who were struggling the most.

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Average weekly earnings for full-time Australian workers has grown to $1711.60 a week. Picture: iStock

Those working in education and training recorded the highest annual wage rise of 2.4 per cent, while unsurprisingly employees in the accommodation and food services recorded the lowest annual rise of 0.3 per cent.

Sadly, the increase in hospitality wages was attributed not to pay increases, but a rise in the workers’ award pay rate.

THE WORST IMPACTED SECTORS

Mr Jarvis said another set of data looking at weekly payroll jobs and wages was introduced last year specifically to track jobs during the pandemic.

It gets fast-tracked weekly payroll data from most medium and large businesses as well as about 80 per cent of small businesses, through the Single Touch Payroll (STP) system.

Payroll data showed 871,500 people lost their jobs between March and May last year, a decrease of 6.8 per cent jobs since March 14 last year.

The figures have improved since then, with the latest figures covering the period up to February 13, showing the total number of jobs are now just 1.3 per cent lower.

The biggest drop has been in Victoria, which suffered through a second lockdown with its jobs still down by 3 per cent.

The Northern Territory actually saw jobs grow by 2 per cent. Other states that saw jobs increase were South Australia (0.7 per cent) and Western Australia (0.3 per cent).

Certain industries saw a jump in the number of jobs including financial and insurance services (5.6 per cent increase), public administration and safety (5.4 per cent), and health care and social assistance (4 per cent).

Others saw significant declines, in particular, accommodation and food services (12.4 per cent decrease) and education and training (9.3 per cent).

The payroll data also looks at the total amount of wages being paid.

It found there was a 0.4 per cent decrease in the amount of money being paid in wages in Australia over the same period. Western Australia saw the biggest drop among states, with its total wages dropping by 2.1 per cent, while Northern Territory saw the total amount of wages increase by 3.5 per cent.

The mining industry saw the biggest drop in total wages, with a 16.1 per cent drop, followed by accommodation and food services, which dropped by 10.7 per cent.

Unsurprisingly, health care and social assistance saw the biggest increase of 5.9 per cent.

Mr Jarvis said the biggest impact from the COVID pandemic was seen in April and May when there were the largest job losses.

“Since then, most parts of the country saw improvements every month,” he said.

“Victoria started to recover but then they had the second wave. For the rest of Australia, from May to the end of 2020 there was a pretty steady recovery, which was faster and slower in different states and territories, at different points.”

While there was a dip at the beginning of this year, Mr Jarvis said this reflected normal seasonal changes due to lower business activity during the period after Christmas and a combination of public and school holidays.

YOUNG PEOPLE LEFT BEHIND

Young people in particular saw the biggest drop in jobs, with a 2.5 per cent drop among those aged 20 to 29 years old.

This compares to a 2.8 per cent increase in jobs among those aged between 60 and 69, who also benefited from a 4 per cent increase in wages.

Mr Jarvis said lower paid jobs were still over-represented among those yet to see a post-COVID recovery.

“About three-quarters of the jobs lost early in the pandemic were casual jobs that didn’t have leave,” he said.

“Younger workers were disproportionately impacted by loss of jobs, and loss of hours, and they tended to be on the lower end of the earning distribution.”

“They have yet to get back to employment or to get back the hours they had before the pandemic started.”

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