Wage growth slows, female earners suffer most

Wage growth and wage expectations have taken a downward turn. Flickr/HoskingIndustries

Wage growth has slowed in the last quarter, with pay rising at just 2.9% over the last 12 months to August, down from 5.1% in the 12 months to May, a new survey shows.

The survey of 1200 households, conducted by the University of Melbourne’s Melbourne Institute of Applied Economic and Social Research, also found that expectations of a pay rise have dampened. The average expected pay change in the next 12 months is at 3%, down from 3.3% in the May survey.

The survey did not ask people to give reasons for their responses but Dr Edda Claus from the Melbourne Institute said the results were consistent with a slowing in the labour market.

“If there is less job growth, then people tend to experience less wage growth and tend to expect less wage growth in future,” she said.

“Last quarter, there was a large rise (in wage growth) at 5.1%, so this is a big turnaround.”

Pay rises reported by males were more than double the rises reported by females, most likely a reflection of a weak retail sector (where many employees are women), she said.

Men were also more optimistic than women about future pay growth, expecting rises at around 4.1%, while women workers expect around 1.9%.

Dr Claus said the recent global economic turmoil was not necessarily behind the drop in average wage growth the survey revealed.

“We are asking people how much have their salary changed over the last 12 months, so I don’t see why the last couple of weeks would have affected it,” she said.