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CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Friday, 24 February 2017

Earnings up, not a lot

Earnings trudge on

Average weekly earnings for males working full-time increased by only 1.8 per cent in the year to November 2016, according to the Australian Bureau of Statistics (ABS).

Thus earnings for men working full-time increased faster than inflation, but not really by much. 

Although coming from a substantially lower base, average earnings for females working full-time are faring relatively much better, increasing by 3.3 per cent over the year to November. 

Since May 2012 on these measures full-time total earnings have increased by 15 per cent for females compared to only 12 per cent for males. 

This in part may reflect that women have historically been paid and promoted far less than men, and in professional and services roles this imbalance is being addressed, albeit gradually.

Furthermore wages growth in male-dominated industries such as the mining and resources sectors has been very sluggish over the past year

Public sector wages rising faster

It was also notable from the ABS release that public sector earnings are rising at a considerably faster pace than in the private sector, with ordinary time earnings up by 3.4 percent and total earnings up 3.3 per cent for full-time employees.

This is likely to be good news for inhabitants of Canberra, where ordinary time earnings are on average higher than anywhere else in the country!  

Piecing all of this together, over the year to November 2016 full time adult average weekly ordinary time earnings ("AWOTE") increased by 2.2 per cent to $1,533.10, as reported by the ABS.

Meanwhile the full-time adult average weekly total earnings in November 2016 was $1,592.40, which was also a rise of 2.2 per cent from the same period last year.

Mining states

The original figures - not seasonally adjusted - can naturally be a little volatile at the state level.

What they do show, however, is that male total earnings for full-time workers are still on average highest in the resources states of Western Australia and the Northern Territory, reflecting that solid bonuses can be earned in this sector, while fly-in fly-out workers (FIFO) may be well compensated for their time spent working remotely.  

This trend has persisted is in spite of the mining industry recording the weakest year-on-year growth in wages

The wrap

Overall, it's clear that while real earnings are still rising in Australia, the gains have been relatively moderate of late.

At the present time, therefore, the prognosis appears to be best for households with two incomes given that female full-time earnings are rising at a more sprightly pace than their male equivalents. 

What's more, it's in the public sector and in the services sectors such as healthcare, social assistance, education and training that the fastest wages and earnings growth in taking place.

The outlook for resources regions is in many instances bleak by comparison. 

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