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 2021 the seasonally adjusted WPI:
- Rose 0.6% over the quarter and 1.5% over the year.
- Also rose 0.6% in the private sector and 0.4% in the public sector.
Wage growth by sector
Through the year to March quarter 2021, seasonally adjusted:
- Private sector rose 1.4%.
- Public sector rose 1.5%.
annual changes, seasonally adjusted, 1997 to 2021
The private sector remained at 1.4% for the second quarter in a row following a September quarter 2020 low. The public sector recorded the lowest annual rate since the commencement of the series.
Drivers of wage growth
Growth in wages over March quarter 2021 was mainly influenced by regular scheduled enterprise agreement increases, salary reviews for jobs paid by individual arrangements, and a proportion of modern awards receiving increases as a result of the Fair Work Commission (FWC) Annual Wage Review 2019-2020 decision.
Industries experiencing improved business conditions saw employers revisit wage reviews for jobs paid by individual arrangement that had been placed on hold during the peak of the pandemic.
The FWC phased implementation schedule of award increases saw the final group of awards (accommodation and food services, retail trade, arts and recreation, aviation and tourism industries) receive scheduled increases in March quarter. The shift in timing of these award increases, from a regular September quarter, has dispersed the influence these jobs have had on quarterly growth across the September, December and March quarters
Wage growth by industry
- Accommodation and food services recorded the highest quarterly rise of 1.2%. The main driver of the industry’s wages growth were increases to award and award-reliant jobs influenced by the FWC decision.
- Electricity, gas, water and waste services, Rental, hiring and real estate services and Arts and recreation services each recorded the lowest quarterly rise of 0.1%. The Rental, hiring and real estate services industry also recorded the lowest annual rise of 0.4%.
- Education and training recorded the highest annual rise of 2.2%.
- All industries recorded lower annual wage growth than the year before.