Prime Minister Malcolm Turnbull is “thrilled” with predictions a lift in wages growth is on the cards after last week’s Deloitte Wage View showed latent strength in the domestic jobs market. Deloitte Economist Chris Richardson describes the strength as a “beautiful thing”.
“It’s the one thing Canberra is holding its breath over,” he told AAP.
Deloitte expects the good global growth will lift demand for both labour and investment.
Over the past year there has already been strong jobs growth. 371,000 created with 85 per cent of those fulltime.
Currently wage growth is running at a twenty year low. In real terms, when adjusted for inflation, it’s roughly zero.
Interestingly, wage growth through enterprise bargaining with unions is also close to the inflation rate. As such agreements historically take into account productivity increases, it’s a concerning sign that either industry is struggling to lift productivity or the labour market is weak.
In the quarter ending 30 June, such enterprise agreements showed an annualised rate of 2.6 per cent down from 2.7 per cent three months earlier. Brendan O’Connor, federal Labour employment spokesman says is a 26-year low.