The WPI measures changes in the price of labour, unaffected by compositional shifts in the labour force, hours worked or employee characteristics
In March quarter 2022 the seasonally adjusted WPI:
| Dec Qtr 2021 to Mar Qtr 2022 % change | Mar Qtr 2021 to Mar Qtr 2022 % change | |
|---|---|---|
| Trend(a) | ||
| Australia | na | na |
| Private sector | na | na |
| Public sector | na | na |
| Seasonally Adjusted(b) | ||
| Australia | 0.7 | 2.4 |
| Private sector | 0.7 | 2.4 |
| Public sector | 0.6 | 2.2 |
| Original | ||
| Australia | 0.6 | 2.4 |
| Private sector | 0.5 | 2.4 |
| Public sector | 0.6 | 2.2 |
Wages grew by 2.4% over the year to March quarter 2022, with the annual rate of growth rising in each of the last five quarters from a low point of 1.4% in December quarter 2020.
Wage rises across the private sector were the main driver of wage growth over the quarter. Private sector wages grew by 0.7% for the quarter while public sector wages grew by 0.6%.
The average size of wage rises within the private sector increased while the proportion of jobs recording these rises dropped back to pre-pandemic March quarter levels, after being boosted by award-based jobs in March quarter 2021.
Private sector wages rose 2.4% annually, maintaining the same seasonally adjusted rate of growth since September quarter 2021.
Public sector wages grew 2.2% over the year to March quarter 2022. This is the third consecutive quarter in which the rate of growth has increased.
Private sector wages grew 0.7% over the quarter. Regular annual wage and salary reviews drove wage growth for the sector, with a small number of larger increases paid to retain and attract in-demand skilled workers.
Public sector wages rose 0.6% over the quarter with a higher proportion of jobs receiving increases than in recent March quarters, due to timing changes for a few large enterprise agreements.
Jobs covered by individual arrangements continued to be the largest contributor to wage growth in recent quarters. Labour market pressures have provided a gradual upward influence on the size of increases for a number of these market sensitive jobs over the last three quarters.
The contribution of enterprise agreements remained relatively consistent with previous March quarters, supported by regular public sector scheduled wage rises across the Education and training and Public administration and safety industries.
The contribution to growth from award jobs returned to a level consistent with historic March quarters. March quarter 2021 was higher than usual following the Fair Work Commission’s Annual Wage Review 2019-20 decision which included a change to the usual timing of award wage increases.
The ABS has examined the average size of wage movements and the proportion of jobs recording a wage movement over the last 10 years to give further insight into these two components of wage growth in Australia.
The size of wage movements recorded across both the private and public sectors have followed a similar pattern over the last ten years, with the average size of wage movement in the public sector generally tracking below the private. The periods in which the average wage movements have more closely aligned coincide with times of spare capacity in the labour market.
Typically, a higher proportion of private sector jobs record a wage change in the September quarter, coinciding with the start/end of a financial year. This reflects both wage rises based around businesses outcomes, and, for award based jobs, the scheduled implementation of the Annual Wage Review.
After almost 5 years of relatively consistent average increases, the private sector responded quickly to the economic shock of the COVID-19 pandemic in June quarter 2020. Employers negotiated short-term wage reductions with employees, mostly for jobs covered by individual arrangements and wage freezes for those aligned with enterprise agreements. These wage reductions were unwound over the September and December quarters 2020 with average wage increases in the private sector returning to pre-pandemic levels during 2021.
In March quarter 2022 the average size of wage rises for private sector jobs was the highest seen since June quarter 2013. This increase was partially driven by a small proportion of in-demand market sensitive jobs recording large increases.
Wage rises for public sector jobs are generally defined by enterprise agreements which can determine the timing and size of wage rises across many years. The timing of agreement related wage rises varies across the sector and is typically less aligned to business cycles within the broader labour market.
Over most of the last ten years the main contributor to public sector wage growth has been the proportion of jobs recording a wage change, as the average size of wage movement has remained between 2.0% and 2.5%. The proportion of public sector jobs receiving a pay rise can fall when there is an interruption between an enterprise agreement expiring and a new enterprise agreement coming into place. Over the most recent years, many public sector jobs have also been affected by wage freezes, particularly during the COVID-19 pandemic. Wage freezes and restraints implemented by the different levels of government in response to the pandemic have been removed gradually over the last year, contributing to an increase in the proportion of jobs reporting a wage rise since September quarter 2021.
Original estimates:
Original estimates:
In line with updating to more recent technology formats, the ABS will progressively transition to releasing Excel files in the .XLSX format. This means that timeseries spreadsheets in the suite of prices statistics releases will be progressively upgraded from .XLS files to .XLSX files.
While this change will improve usability, it may also require changes to automated macros or similar programs that users may have in place that call on the current file extension format.
For Wage Price Index products, this change will take effect from the release of December data on 23 February 2022. Previously released data will not change.
Caution: Data in Data Explorer is currently released after the 11:30am release on the ABS website. Please check the reference period when using Data Explorer.
For information on Data Explorer and how it works, see the Data Explorer user guide.
This release previously used catalogue number 6345.0.
Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis. Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).
Use of Price Indexes in Contracts sets out a range of issues that should be taken into account by parties considering the inclusion of an Indexation Clause within a contract utilising an ABS published price index.
The Wage Price Index FAQs page has answers to a number of common questions to do with price indexes and the Wage Price Index, in particular.