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1301.0 - Year Book Australia, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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Contents >> Labour >> Earnings and benefits

Statistics on earnings are of interest to help evaluate the standard of living of employees, and to make policy decisions regarding income redistribution, social welfare, taxation and wage fixation. Comprehensive earnings statistics are required by all levels of government, social and labour market analysts, industrial tribunals, trade unions, employer associations, academics and international agencies. Information about the benefits received by workers provides a broader picture of working conditions, and of rewards provided for work done.

The ABS concept of earnings is based on the definition adopted by the twelfth International Conference of Labour Statisticians in 1973. Earnings are considered to be remuneration to employees, for time worked or work done, as well as remuneration for time not worked (e.g. paid annual leave). Many employees also receive other benefits in addition to earnings, including long-service leave and superannuation.

The ABS produces a range of statistics on earnings paid to workers. The quarterly Survey of Average Weekly Earnings (AWE) and the biennial Survey of Employee Earnings and Hours (EEH) both provide a statistical measure of the gross remuneration paid to employees. The EEH survey also provides estimates of earnings for each of the pay setting methods (i.e. awards, individual agreements and collective agreements). The Survey of Employee Earnings, Benefits and Trade Union Membership, which is run annually as a Labour Force Supplementary Survey, provides information about the earnings of employees, as well the number and type of employee benefits received by workers. It does not, however, quantify the value of these benefits.

The quarterly Wage Cost Index (WCI) measures the changes to wages and salaries of a representative mix of employee jobs. Unlike the AWE and EEH surveys, the WCI is unaffected by changes in the quantity or quality of work performed. The ABS is currently developing a labour price index, which will also reflect changes in the price of 'non-wage' components (e.g. superannuation and workers' compensation) which contribute to the cost to employers of employing labour. It is expected that the labour price index will be published from late 2004.

Level of earnings

Data on the level of earnings reflect the variations within different population groups, and across industries and occupations, providing a more detailed picture of their comparative experiences. Differences in earnings are also of interest in reflecting the strength of labour demand and supply.

The AWE survey provides an estimate of the gross weekly earnings paid to employees by measuring earnings during a one-week reference period in the middle month of a quarter (excluding irregular earnings not related to the reference period). Data are collected from the payrolls of a sample of employers.

The AWE survey collects three types of earnings data. Average weekly ordinary time earnings for full-time adult employee jobs (commonly referred to as AWOTE) relate to that part of total earnings attributable to award, standard or agreed hours of work. A second measure is full-time adult total earnings, which includes both ordinary time and overtime pay. A third measure is total earnings for all employees (including full-time and part-time, adult and junior).

Graph 6.41 shows AWOTE from February 1993 to February 2003. Over the 10-year period, AWOTE for male employees and female employees each increased by 52%, from $628.60 to $954.10 for males and from $530.60 to $805.50 for females.

Graph - 6.41 Average weekly ordinary time earnings


Table 6.42 shows that, in February 2003, the difference between male and female average weekly earnings was least for AWOTE (females earned 84% of the male figure of $954.10) and greatest for all employees total earnings (females earned 65% of the male figure of $862.60). The latter difference reflects the inclusion of part-time employees, as a higher proportion of female employees work part-time. In February 2003, 45% of female employees worked part-time compared to 14% of male employees.

6.42 AVERAGE WEEKLY EARNINGS - February 2003

Males
Females
Persons
$
$
$

Full-time adult ordinary time earnings
954.10
805.50
900.40
Full-time adult total earnings
1,009.00
819.00
940.30
All employees total earnings
862.60
564.10
717.40

Source: Average Weekly Earnings, Australia, February 2003 (6302.0).

Table 6.43 presents the male and female AWOTE for full-time adults by state and territory in February 2003. The highest weekly earnings for both males and females was in the Australian Capital Territory. The lowest weekly earnings for males was in Queensland and the lowest for females was in Tasmania.

6.43 AVERAGE WEEKLY EARNINGS, By state and territory - February 2003

Full-time adult ordinary time earnings

Males
Females
Persons
$
$
$

New South Wales
1,016.50
842.10
950.90
Victoria
954.20
807.30
902.00
Queensland
856.60
754.50
820.10
South Australia
884.60
781.60
850.90
Western Australia
960.70
752.20
889.30
Tasmania
863.00
748.30
826.00
Northern Territory
936.80
807.90
880.30
Australian Capital Territory
1,122.40
916.10
1,031.80
Australia
954.10
805.50
900.40

Source: Average Weekly Earnings, Australia, February 2003 (6302.0).

Graph 6.44 shows that, in February 2003, the Mining industry recorded the highest AWOTE for full-time adults of $1,443.90 for males and $1,054.30 for females. The industries with the lowest average were Accommodation, cafes and restaurants ($674.30) and Retail trade ($683.70).

AWOTE for full-time adult females was less than for males in all industries. Full-time adult females earned approximately two-thirds (63%) of male full-time adult ordinary time earnings in the Finance and insurance industry, rising to 92% in the Retail trade industry.

Graph - 6.44 Average weekly ordinary time earnings, By industry - February 2003


Data on average weekly earnings are also available from the biennial EEH survey. This survey provides additional classifications of the data, such as category of employee, type of earnings and occupation. Average weekly total earnings for full-time adult employees by occupation for May 2002 are presented in graph 6.45. For both males and females, Elementary clerical, sales and service workers earned the lowest average weekly earnings of all the occupations ($693.20 for males and $578.40 for females), whereas the highest earnings were for Managers and administrators ($1,525.50 for males and $1,240.00 for females).

Men had higher average earnings than women in each occupation. For full-time adult employees, the proportional difference between male and female average weekly total earnings was smallest for Professionals (average earnings of females were 86% of those of males) and greatest for Intermediate production and transport workers (72%).

Graph - Average weekly total earnings, By occupation - May 2002


How pay is set

Information on the methods of setting the main part of employees' pay is collected in the biennial EEH survey. Three different methods of setting pay are identified in EEH: awards, collective agreements and individual agreements. Data are also collected on whether agreements (individual and collective) are certified, approved or registered with an industrial tribunal or authority.

Awards are legally enforceable determinations made by federal or state industrial tribunals that set the terms of employment, including pay. In the EEH survey, employees whose pay is set by an award only are those who have the main part of their pay set by an award and who are not paid more than the award rate of pay.

Collective agreements, which include enterprise and workplace agreements, are arrangements between one or more employers and a group of employees (or associations representing employees) that set the terms of employment, including pay, for a group of employees.

Individual agreements set the terms of employment, including pay, for an individual employee, and are agreed to by the individual. The agreement may be verbal or written. Employees whose pay is set by individual agreements include those who have registered individual agreements, those whose pay is set by an individual common law contract, employees receiving pay at more than the award rate by individual agreement, and working proprietors of incorporated enterprises who set their own rate of pay.

Table 6.46 shows that, in May 2002, the most common method of setting pay was individual agreements (41%), followed by collective agreements (38%) and awards only (20%). Half of all private sector employees had their pay set by individual agreements (50%). In contrast, only 6% of public sector employees had their pay set by individual agreements, with the majority covered by collective agreements (90%). Males were more likely than females to have their pay set by an individual agreement (48% compared to 35%), and less likely than females to have their pay set by an award only (15% compared to 26%). Part of the difference between male and female employees can be attributed to their different occupation and industry mix.

6.46 METHODS OF SETTING PAY, By sector and sex - May 2002

Award
only
Collective
agreement(a)
Individual
agreement(a)
Total
%
%
%
%

Males
Private sector
17.7
25.8
56.6
100.0
Public sector
4.0
88.5
7.6
100.0
All sectors
15.1
37.3
47.5
100.0
Females
Private sector
32.2
24.1
43.7
100.0
Public sector
5.1
90.9
4.0
100.0
All sectors
26.1
39.2
34.7
100.0
Persons
Private sector
24.6
25.0
50.5
100.0
Public sector
4.6
89.8
5.6
100.0
All sectors
20.5
38.2
41.3
100.0

(a) Includes registered and unregistered agreements.
Source: Employee Earnings and Hours, Australia, May 2002 (6306.0).

The methods of setting pay varied considerably across occupation groups. Employees in higher skilled occupation groups were more likely to have their pay set by an individual or collective agreement, while employees in lower skilled occupation groups were more likely to have their pay set by an award only (table 6.47). For example, 79% of Managers and administrators had their pay set by an individual agreement while less than 1% had their pay set by award only. In contrast, 23% of Elementary clerical, sales and service workers had their pay set by an individual agreement, while 41% had their pay set by an award only.

6.47 METHODS OF SETTING PAY, By occupation(a) - May 2002

Award
only
Collective
agreement(b)
Individual
agreement(b)
Total
%
%
%
%

Managers and administrators
*0.4
20.5
79.1
100.0
Professionals
7.4
55.7
36.9
100.0
Associate professionals
6.1
37.7
56.2
100.0
Tradespersons and related workers
25.7
27.9
46.4
100.0
Advanced clerical and service workers
12.1
24.4
63.4
100.0
Intermediate clerical, sales and service workers
25.2
35.1
39.7
100.0
Intermediate production and transport workers
17.7
46.1
36.2
100.0
Elementary clerical, sales and service workers
41.5
35.2
23.3
100.0
Labourers and related workers
34.4
38.1
27.5
100.0
All occupations
20.5
38.2
41.3
100.0

(a) Classified according to the Australian Standard Classification of Occupations, Second Edition.
(b) Includes registered and unregistered agreements.
Source: Employee Earnings and Hours, Australia, May 2002 (6306.0).

The methods of setting pay also varied considerably across industry groups. Table 6.48 shows that, in May 2002, Wholesale trade had the highest proportion of employees whose pay was set by individual agreements (80%), and Government administration and defence had the highest proportion of employees whose pay was set by collective agreements (87%). The Accommodation, cafes and restaurants industry had the highest proportion of employees whose pay was set by award only (61%).

6.48 METHODS OF SETTING PAY, By industry(a) - May 2002

Award
only
Collective
agreement(b)
Individual
agreement(b)
Total
%
%
%
%

Mining
**5.9
40.5
53.6
100.0
Manufacturing
12.5
37.5
50.0
100.0
Electricity, gas and water supply
*1.1
78.1
20.9
100.0
Construction
17.1
23.1
59.8
100.0
Wholesale trade
11.7
7.9
80.4
100.0
Retail trade
34.2
30.3
35.4
100.0
Accommodation, cafes and restaurants
61.2
*6.8
32.0
100.0
Transport and storage
16.4
40.3
43.3
100.0
Communication services
*2.4
69.1
28.4
100.0
Finance and insurance
*4.9
50.0
45.1
100.0
Property and business services
18.1
11.7
70.1
100.0
Government administration and defence
6.0
86.6
7.4
100.0
Education
7.8
83.5
8.7
100.0
Health and community services
30.3
49.5
20.1
100.0
Cultural and recreational services
10.9
31.2
57.8
100.0
Personal and other services
22.2
42.6
35.3
100.0
All industries
20.5
38.2
41.3
100.0

(a) Classified according to the Australian and New Zealand Standard Industrial Classification.
(b) Includes registered and unregistered agreements.
Source: Employee Earnings and Hours, Australia, May 2002 (6306.0).

Table 6.49 shows the average weekly total earnings of employees under the different methods of setting pay. In May 2002, employees whose pay was set by individual agreements earned an average of $781.70 a week, compared to $755.40 for employees whose pay was set by collective agreements. The average weekly total earnings of employees whose pay was set by an award only was considerably lower ($419.90). However, such broad level comparisons can be strongly affected by the association between certain employee characteristics (such as occupation, full-time/part-time status, sex and industry of employment) and the methods used to set pay.

6.49 METHODS OF SETTING PAY, Average weekly total earnings - May 2002

Award
only
Collective
agreement(a)
Individual
agreement(a)
Total
$
$
$
$

Males
Full-time employees
639.00
993.90
977.30
945.20
Part-time employees
300.20
381.30
356.60
347.20
All employees
507.20
888.90
895.20
834.10
Females
Full-time employees
553.60
836.10
778.20
766.60
Part-time employees
283.00
374.30
338.00
331.30
All employees
366.60
621.90
618.10
554.00
Persons
Full-time employees
600.30
931.90
910.20
878.40
Part-time employees
287.40
376.20
344.40
335.80
All employees
419.90
755.40
781.70
697.60

(a) Includes registered and unregistered agreements.
Source: Employee Earnings and Hours, Australia, May 2002 (6306.0).

Changes in the price of labour

Changes in the price of labour are derived from quality adjusted average hourly rates of pay (excluding bonuses) of a representative sample of employee jobs. These data are compiled to form the WCI, which is published by the ABS each quarter. The WCI is a 'pure' price index which measures changes over time in wage and salary costs in the Australian labour market. The WCI is unaffected by changes in the quality and quantity of work performed.

As shown in table 6.50, increases in the indexes for total hourly rates of pay excluding bonuses varied across sectors and across states and territories. In the 12 months to March 2003, public sector wages grew at 4.0% and private sector wages grew at 3.5%. Since the March quarter 2000, the percentage growth (from the corresponding quarter of the previous year) of public sector wages has been higher than or equal to the growth in private sector wages with the exception of the September quarter 2002.

For the states and territories, the highest annual percentage increase in wages from the March quarter 2002 to the March quarter 2003 was recorded by New South Wales (3.9%) and the lowest was recorded by Tasmania and the Northern Territory (both 3.1%). The Northern Territory recorded the smallest annual growth in the private sector WCI (3.0%), and South Australia the highest (3.8%). In the public sector Tasmania recorded the smallest annual growth (2.9%) and New South Wales the largest (4.9%).

6.50 TOTAL HOURLY RATES OF PAY EXCLUDING BONUSES, By sector



Index numbers(a)
Percentage change from corresponding quarter
of previous year


State/territory
March
quarter 2002
June
quarter 2002
September quarter 2002
December quarter 2002
March
quarter 2003
March
quarter 2003

PRIVATE

New South Wales
115.6
116.2
117.9
118.7
119.7
3.5
Victoria
114.9
115.8
117.5
118.4
119.0
3.6
Queensland
113.9
114.4
115.4
116.8
117.5
3.2
South Australia
114.1
114.6
116.3
117.7
118.4
3.8
Western Australia
115.1
115.9
117.8
118.5
119.2
3.6
Tasmania
112.4
112.9
114.4
115.5
115.9
3.1
Northern Territory
112.7
113.1
114.9
115.4
116.1
3.0
Australian Capital Territory
115.0
115.6
117.2
117.8
118.9
3.4
Australia
114.9
115.6
117.2
118.1
118.9
3.5

PUBLIC

New South Wales
117.9
118.0
119.0
120.0
123.7
4.9
Victoria
115.6
116.9
118.1
119.2
120.0
3.8
Queensland
116.5
117.5
118.7
119.0
120.8
3.7
South Australia
116.8
116.9
118.5
120.4
120.8
3.4
Western Australia
114.5
114.9
116.7
117.3
119.1
4.0
Tasmania
114.5
115.1
116.3
117.6
117.8
2.9
Northern Territory
115.8
115.9
116.7
117.1
119.4
3.1
Australian Capital Territory
113.1
113.5
115.2
116.4
117.6
4.0
Australia
116.4
116.9
118.2
119.1
121.1
4.0

ALL SECTORS

New South Wales
116.1
116.6
118.2
118.9
120.6
3.9
Victoria
115.0
116.0
117.6
118.5
119.2
3.7
Queensland
114.6
115.2
116.3
117.4
118.4
3.3
South Australia
114.8
115.2
116.9
118.5
119.1
3.7
Western Australia
114.9
115.7
117.6
118.2
119.2
3.7
Tasmania
113.1
113.7
115.0
116.2
116.6
3.1
Northern Territory
113.9
114.1
115.6
116.0
117.4
3.1
Australian Capital Territory
113.8
114.3
116.0
116.9
118.1
3.8
Australia
115.2
115.9
117.4
118.3
119.4
3.6

(a) Base of each index: September quarter 1997 = 100.0.
Source: Wage Cost Index, Australia (6345.0).

For Australia, the annual wages growth to March 2003 was greater than the annual growth to March 2002 (3.6% compared to 3.1%). As shown in graph 6.51, the rate of increase in wages across all major occupation groups was greater for the year ending March 2003 than for the year ending March 2002. In both periods, annual wages growth for Professionals (3.5% to March 2002 and 4.2% to March 2003) was greater than that for other major occupation groups. Intermediate production and transport workers recorded the lowest annual growth rate of 3.2% for the year ending March 2003.

Graph - 6.51 Total hourly rates of pay excluding bonuses, By occupation


Annual growth by industry is shown in graph 6.52. For the 12 months to March 2003, the increases in wages ranged from 1.5% for Communication services to 5.1% for Education. The 5.1% increase for Education is the largest annual movement recorded for this industry since the series commenced in September 1997. The annual growth rate of the WCI was higher to March 2003 than for the previous year for all industries other than Mining, Electricity, gas and water supply, Communication services, Finance and insurance, and Personal and other services, with the rate remaining the same for Property and business services.

Graph - 6.52 Total hourly rates of pay excluding bonuses, By industry


Non-wage benefits

Types of non-wage benefits received by employees include leave benefits (such as holiday leave, sick leave, long-service leave, maternity/paternity leave), and superannuation. Data on these employment benefits are collected in the ABS Survey of Employee Earnings, Benefits and Trade Union Membership, covering the nature and type (but not value) of benefits.

Leave benefits

As shown in graph 6.53, the proportion of employees entitled to paid holiday leave or sick leave declined over the period 1992-2002 (from 78% of all employees in 1992 to 71% in 2002), with most of the decline occurring between 1992 and 1996. Entitlement to long-service leave fell between 1992 and 1999 (from 66.5% to 61.1% of all employees), but has since increased to 63.3% in 2002.

Graph - 6.53 Employees in main job, By type of standard leave benefit received


Table 6.54 shows the proportion of employees entitled to standard leave benefits by occupation. In August 2002, about three-quarters of male employees were entitled to paid holiday and/or sick leave. More than 80% of males were entitled to holiday and/or sick leave in five occupation groups: Managers and administrators, Professionals, Associate professionals, Tradespersons and related workers, and Advanced clerical and service workers.

Just over two-thirds (68%) of females were entitled to paid holiday and/or sick leave. For females there were three occupation groups with more than 80% of employees entitled to these leave benefits: Managers and administrators, Professionals and Associate professionals.

6.54 EMPLOYEES IN MAIN JOB, Leave entitlements - August 2002


Occupation(a)

Units
Sick leave and/or
holiday leave(b)

Long-service leave

MALES

Managers and administrators
%
85.1
71.8
Professionals
%
83.9
73.8
Associate professionals
%
83.7
70.5
Tradespersons and related workers
%
83.1
70.4
Advanced clerical and service workers
%
83.3
76.6
Intermediate clerical, sales and service workers
%
79.2
70.8
Intermediate production and transport workers
%
72.9
64.4
Elementary clerical, sales and service workers
%
52.2
41.3
Labourers and related workers
%
56.7
44.8
All occupations
%
76.5
65.4
Total number of employees
'000
3,262.8
2,791.8

FEMALES

Managers and administrators
%
86.6
75.3
Professionals
%
83.8
78.1
Associate professionals
%
81.8
68.4
Tradespersons and related workers
%
68.6
53.0
Advanced clerical and service workers
%
75.3
64.5
Intermediate clerical, sales and service workers
%
68.1
61.0
Intermediate production and transport workers
%
58.6
53.2
Elementary clerical, sales and service workers
%
41.8
37.2
Labourers and related workers
%
48.2
41.5
All occupations
%
68.4
60.8
Total number of employees
'000
2,503.9
2,226.6

PERSONS

Managers and administrators
%
85.5
72.6
Professionals
%
83.8
76.0
Associate professionals
%
82.9
69.6
Tradespersons and related workers
%
81.8
68.8
Advanced clerical and service workers
%
76.4
66.8
Intermediate clerical, sales and service workers
%
71.3
63.7
Intermediate production and transport workers
%
71.0
62.9
Elementary clerical, sales and service workers
%
45.5
38.7
Labourers and related workers
%
53.6
43.6
All occupations
%
72.7
63.3
Total number of employees
'000
5,766.7
5,018.4

(a) Classified according to the Australian Standard Classification of Occupations.
(b) Of those persons entitled to paid holiday and/or paid sick leave, 97% were entitled to both types of leave.
Source: Employee Earnings, Benefits and Trade Union Membership, Australia, August 2002 (6310.0).

Superannuation

Under the Superannuation Guarantee Act (Cwlth) introduced in 1992, employers are obliged to make superannuation contributions on behalf of most employees. This has resulted in an increase in superannuation coverage provided by employers. As shown in graph 6.55, superannuation coverage increased from 80.3% of all employees in August 1992 to 89.9% in August 2002. There are some exempt employees: for example, employers are not obliged to contribute to superannuation for employees aged less than 18 years who are working not more than 30 hours a week, or for employees on low earnings.

Graph - 6.55 Employees in main job, Entitled to superannuation


Graph 6.56 shows the proportion of employees entitled to superannuation by earnings group, in August 2002. Overall, the proportion of male and female employees entitled to superannuation was similar (males 90.6%, females 89.1%). In the lower earnings groups, females have higher superannuation coverage than males. In August 2002, 54.6% of female employees earning less than $200 a week were entitled to superannuation, compared with 43.5% of male employees.

Graph - 6.56 Employees entitled to superannuation in main job, By weekly earnings - August 2002


Between August 1997 and August 2002, superannuation coverage provided by employers increased across most industries. The largest increase over this period was in Accommodation, cafes and restaurants, rising from 75.9% of all employees in August 1997 to 81.6% in August 2002.

In August 2002, superannuation coverage was highest in Government administration and defence (97.7%). Retail trade and Accommodation, cafes and restaurants had the lowest coverage (77.9% and 81.6% respectively). Retail trade and Accommodation, cafes and restaurants also have the lowest average earnings (graph 6.57 and graph 6.44).

Graph - 6.57 Employees entitled to superannuation in main job, By industry


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