It didn’t take long for the “wage price spiral” chorus to start. About two hours after the Australian Bureau of Statistics (ABS) released wages data for the December quarter, Innes Willox of the Australian Industry Group declared that the reported 0.9% quarterly increase in the wage price index was unsustainably high and “the thin end of a very damaging wedge”.
Worse still, “the very large wage increases emerging in particular areas of the economy present additional concerns over the direction of wages under the government’s new workplace relations arrangements”.
If only, Innes, if only. Perhaps his team was misled by the media coverage that emphasised that the annual increase of 4.2% was the highest since March 2009. In fact, overall wages growth fell back from the artificially high September 2023 quarter to the same level it was in March last year. Private sector wages fell back to the same level that, apart from the September 2023 quarter, they’ve broadly grown at since mid-2022: they’ve grown at 0.9% every quarter since June 2022 apart from September 2022 (1%) and September last year.
The only reason for the strong number was because public sector pay is finally going up. Normally, public sector wages growth amounts to 10-25% of overall wages growth. In the December quarter, it was 34%.
Perhaps former Reserve Bank governor Philip Lowe can take solace in retirement knowing that governments finally heeded his calls from 2018 to lift wages by removing public sector wages caps.
As for Willox’s warnings about “very large wage increases emerging in particular areas of the economy”, where were they? Well, the fastest growing sector in December was education and training, where wages rose 1.7% in what the ABS called “out-of-cycle increases paid to jobs covered by enterprise agreements linked to public sector wage outcomes across both sectors”.
Equal second in the quarter and highest for the year overall (5.5%) was health and social assistance. Again, a sector strongly dominated by the public sector — and like education and training, a strongly feminised workforce. These two sectors together account for nearly one quarter of all workers in Australia.
This isn’t the first time government policies have played a role in boosting wages growth. A substantial part of previous increases in WPI came from the significant increase in aged care workers’ remuneration by the Fair Work Commission, which the federal government agreed to fund.
Despite the dire warnings from business, getting wages growth to 4% — twice the levels plumbed during the Coalition years — has relied on major public sector interventions. Private sector wages growth has improved, reflecting a continuing tight labour market, but eking out a wage rise 0.1% higher than annual inflation hardly suggests a 1980s-style wages explosion.
The nightmare scenario being conjured by Willox is, sadly for private sector workers, still a long way off.
Innes Willox, poster boy for bullshit jobs.
Poor old Innes, he doesn’t look happy, does he. Well neither should he. Big changes are afoot. The retail industry is facing massive changes. Worldwide, shopping malls, the automotive industry, supermarkets, all are in trouble or under investigation. Between the rise of AI, EVs and other high tech developments, the world is changing at an enormous rate and frankly old school dinosaurs like him and the rest of the liberal and labor elite haven’t got a clue what do about it.
Looks like someone shoved a pineapple up his ar$e.
I’d be interested to know what the trend is in CEO salary packages. What is your package, Mr Willox? Is it potentially contributing to inflation, one wonders? What about Me Banducci’s exit package? We never hear criticism from the usual suspects in Newscorpse about these eye-watering amounts…. Multiple thousands greater than the average wage.
“What about Mr Banducci’s exit package?” He’s gonna need a bigger shopping trolley…
I am not sure why this one was held up overnight by the modbot. Pretty innocuous, I thought…
Ines Wilcox? An answer to a question no one asked. Reads from a script. Straight from the pages of the AFR where………
I would subject your analysis even further. I agree with your comment about public sector workers. However these public sector workers are primarily, even overwhelmingly, State government employees – health (nurses), education (teachers), cops, firies, assistants to all of these, maybe others. Poor federal government employees haven’t got a brass razoo (at least in Home Affairs) since March 2023 (3%) and are yet to ratify their latest offer which the gutless so-and-sos will no doubt vote yes to. Federal government sector employees are dragging the chain and the rubbish claims put to them by their management and acceptance by staff is one of the reasons I exited when I did.
Loved the lead pic. Willox looks like I feel when he occasionally pops up on my tv screen.
He looks like he’s trying to pass a particularly hard stool there.
I think anything Ines Wilcox says should be fact checked. Forensically examined. This is obviously a guy who hates workers. There used to be the head of the former Employers Federation, Gary Brack, who used to think the same as the AFR and obviously this Ines Wilcox. Also obviously they hold their employees to a different account than they do to themselves as employers. How many businesses go broke? Cease trading? And not due to retirement.
State and Territory Governments, which overwhelmingly are Labor (Thank you Jesus, Thank you Lord), need to spend big on health and education to prepare for the future, for their future employment prospects, to stop people getting sick and dying prematurely. We are desperately short of people in these categories. Imagine how the coalition would stuff things up if they held as many State and Territory governments now as Labor did. I say, gaol dodgy employers and take their Trust, family and personal company assets if their private or publicly listed business ahs no cash left in the Kitty. Remember National Textiles.
I agree wholeheartedly.However,I would also like to make the observation that the reason for the public service leading the wage fines is due to the fact that they are overwhelmingly unionised.
yep
They appear heavily unionised but you would be surprised at how few teachers are members of the Teacher Federation in NSW. Maybe half. It is the union which provides the leadership on teachers’ issues like pay, career progression, benefits, employment and legal matters. The non-member just coast but because there are tens of thousands of teachers, and half are in the union, it appears that the industry or the profession is heavily unionised which it just isn’t. It’s just sheer weight of numbers.