Stalled Wage Growth in Australia’s Private and Public Sector Related to Underemployment

Underemployment

Australia may be facing a downturn in more than one sector and that is largely due to the current, very ambivalent state of the economy. There has been no significant increase in wages in the private or public sector with only very few exceptions regionally. There is also expected, a dry spell in the wage arena for both these sectors, with the present lull, resulting from inflation. The wage stagnation may also simultaneously relate to the huge number dictating Australia’s underemployment rate, says the latest report, that studied relationships between, the above factors.

The Australian Bureau of Statistics (ABS) reveals that though a tiny push above was observed in private sector wages between 2017 and 2018, the growth has now halted at 2.3% for the last 9 months with not ascendance promises in the coming days. There are too many permutations and combinations and challenges to met if the economy has to reach a state of equilibrium, given the present scenario.

Underemployment level continue to fall, and it this becomes a normal occurrence, then the carrot the budget dangled, of achieving 3% growth in wages, with never become a reality.

The only exemption was witnessed in the public sector, with a 0.8% growth seasonally, a 0.5% step above the growth seen in private sector wages. ABS chief economist, Bruce Hockman, noted, that was mostly due to “the healthcare and social assistance industry, where a number of large increases were recorded in Victoria under a plan to ensure wage parity with other states”.

The rate of underemployment stands at 8.3%. If this does not step down to 7.7% and then 7.2%, the government will not be able to achieve, its aspirational wage growth of 2.75% by next year and 3.25% the year after.