Private sector wage rises hit two-year high

Average pay rises in recently approved private sector agreements have risen above 3 per cent for the first time since 2016.

Private sector wages are on the rise.

Construction union pay deals of 5 per cent have helped lift average pay rises in recently approved ­private sector agreements to 3 per cent for the first time since 2016.

But the average pay rise in all existing private-sector agreements fell from 2.9 per cent to 2.7 per cent in the September quarter, and the number of private-sector workers covered by enterprise agreements dropped 90,000 over three months.

New Jobs Department data shows the average wage increase across the 700 agreements covering 92,000 workers approved in the September quarter was 3.2 per cent a year, with average public sector rises reaching 3.4 per cent.

Jobs and Industrial Relations Minister Kelly O’Dwyer said the data was “further evidence that wages growth is on the rise”. The 3 per cent private sector increase compared with 2.8 per cent in the June quarter and 2.4 per cent a year ago.

“The data continues to show that wages are heading in the right direction,” Ms O’Dwyer said. “The report shows that ­enterprise bargaining continues to be beneficial to both workers and their employers, delivering wage increases above both inflation and economy-wide wage ­increases for Australian workers.”

ACTU secretary Sally McManus said average annual wage ­increases were driven by new agreements in private sector construction and some public sector agreements.

“Average annual wage increases for people on enterprise bargaining agreements still show that working people are struggling to make ends meet and to keep up with the cost of living,’’ Ms McManus said

The average annual 3 per cent increase in private sector agreements is the first time private sector deals have averaged 3 per cent since December 2016.

While the data reflects wage growth across most industries, the overall 3.2 per cent average ­increase partially reflects higher increases in construction industry agreements, as the construction union has generally secured ­annual pay rises of 4 to 5 per cent.

The 3.4 per cent public sector outcome has been impacted by two agreements delivering a 4.5 per cent catch-up pay rise to more than 20,000 doctors and medical specialists in Victoria. The employees had not received a pay rise since December 2015. While the average pay rise in all private sector agreements fell by 0.2 per cent to 2.7 per cent, average rises for all public sector agreements remained at 2.6 per cent.

The department said the pick-up in private sector wages growth was reasonably widespread, having occurred in 10 of 18 industries.

Agreements approved in the September quarter that formally covered unions had a combined average annual wage increase of 3.2 per cent compared to non-union agreements, with an average 2.2 per cent increase.

Ms McManus said the latest data showed the “overall pay rise figure for all agreements is low and coverage by all agreements is continuing to shrink”. She said the growing number of workers not covered by an agreement was concerning.