Why your pay in Australia isn’t rising by much despite bosses struggling to find staff

Why your pay in Australia isnt rising by much despite


Little-known reason your pay ISN’T rising by as much as you thought despite bosses struggling to find staff

  • Wages across the labour market grew by 2.2 per cent in the year to September
  • Better than 1.7 per cent pace of June but well below 3 per cent long-term average
  • CommSec senior economist Ryan Felsman blamed superannuation increase 










Australian workers are missing out on decent pay increases because their employers have to pay more superannuation, an economist says.

Wage levels across all industries rose by 2.2 per cent In the year to September, an improvement on the 1.7 per cent growth in the year to June.

This was the fastest pay increase pace since the start of the pandemic in March 2020, but pay levels are still growing well below the long-term average of three per cent, continuing a persistent trend that began in mid-2013.

The Reserve Bank of Australia is expecting wages to grow by 2.5 per cent in 2022 and not return to the 3 per cent level until 2023. 

Australian workers are missing out on decent pay increases because their employers have to pay more superannuation, an economist says. In the year to September, wage levels across all industries rose by 2.2 per cent (pictured is Prime Minister Scott Morrison meeting with Tooheys Brewery workers)

Australian workers are missing out on decent pay increases because their employers have to pay more superannuation, an economist says. In the year to September, wage levels across all industries rose by 2.2 per cent (pictured is Prime Minister Scott Morrison meeting with Tooheys Brewery workers)

Such a gloomy outlook was despite its forecast of unemployment falling to 4 per cent for only the second time since 1974.

CommSec senior economist Ryan Felsman said Australian workers would be enjoying better pay increases if compulsory employer superannuation contributions had not increased on July 1.

‘The result could have even been stronger,’ he said.

Mr Felsman said the increase in compulsory super from 9.5 per cent to 10 per cent meant the overall wage price index, as calculated by the Australian Bureau of Statistics, was weaker than it could have been.

‘The increase in the compulsory superannuation guarantee from July 1 was not captured, with some employers likely to net this increase off against base pay, dampening the overall result,’ he said.

Minimum wage workers received a 2.5 per cent pay rise on July 1 but tourism and hospitality workers the Fair Work Commission granted tourism and hospitality employers a pay rise exemption until November 1, because of lockdowns.

Despite that delay, food and accommodation sector workers still saw a 2.5 per cent pay increase, putting it above the 2.2 per cent average, as restaurants, pubs, and cafes struggle to find staff.

CommSec senior economist Ryan Felsman said Australian workers would be enjoying better pay increases if compulsory employer superannuation contributions had not increased on July 1 (pictured is a waitress serving customers at Mosman on Sydney's Lower North Shore)

CommSec senior economist Ryan Felsman said Australian workers would be enjoying better pay increases if compulsory employer superannuation contributions had not increased on July 1 (pictured is a waitress serving customers at Mosman on Sydney’s Lower North Shore)

Compulsory superannuation contributions are increasing in 0.5 percentage point increments on July 1 every year until they hit 12 per cent by July 2025.

But Superannuation Minister Jane Hume is unenthusiastic about legislated super increases, and in March told the ABC it would compromise wages.

‘We shouldn’t fool ourselves. A rise in the super guarantee will come at a trade-off, it will come as a trade-off to wages and particularly to wage growth,’ she said.

Superannuation Minister Jane Hume is unenthusiastic about legislated super increases, in March telling the ABC it would compromise pay levels

Superannuation Minister Jane Hume is unenthusiastic about legislated super increases, in March telling the ABC it would compromise pay levels

The Grattan Institute think tank also warned a super increase would hamper wages.

Economist Brendan Coates said Australians on median incomes of $60,000 only needed $150,000 for retirement, provided they had already paid off their home by retirement.

This is well below the $535,000 the Association of Superannuation Funds of Australia recommended for a comfortable retirement, with the pension age rising to 67 from 2023.

Former Labor prime minister Paul Keating, the architect of the compulsory super scheme that debuted in 1992, wants 15 per cent superannuation and that is still the Labor Party’s position. 

Julia Gillard’s Labor government legislated to have super increase to 10 per cent on July 1, 2015 with the goal of reaching 12 per cent by July 2019.

But Tony Abbott’s Coalition government in 2014 delayed to July 1, 2021 the super increase to 10 per cent.



Source link

Share:
Avatar of Bourbiza Mohamed

Written by Bourbiza Mohamed

A technology enthusiast and a passionate writer in the field of information technology, cyber security, and blockchain

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

Melburnian ridicules driver who parked vehicle with ironic bumper stickers

Melburnian ridicules driver who parked vehicle with ironic bumper stickers in his reserved spot

Munichs Famed Christmas Market is Canceled Again

Munich’s Famed Christmas Market is Canceled Again