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​The Complexities of Wage Growth: What Rising Pay and Falling Hours Mean for Workers 

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As Australia’s labor market continues to evolve, wages are rising at a notable pace, fueled by strong demand for skilled talent across various sectors. However, while pay increases are generally outpacing previous trends, there are emerging signs that the balance between wage growth and working hours is becoming increasingly complex.
Reduced working hours, particularly for casual and part-time workers, are impacting overall earnings, despite wage increases aimed at staying competitive. In this environment, small and medium-sized enterprises (SMEs) are facing mounting pressures to adjust their operations and adapt to changing labor dynamics. Ben Thompson, Chief Economist at Employment Hero, delves into these trends and their implications for the broader economy.
Ben Thompson, Chief Economist, Employment Hero says “Wages continue to rise at high rates. Employment Hero data shows wages grew 5% year-on-year, and 2.9% over the quarter, outpacing the ABS Wage Price Index’s 3.5% yearly increase. This is driven by strong demand for talent in sectors like construction and trades, where wages saw a notable 10% rise year-on-year.

However, growth from September to October showed full-time wages remained flat (0%) month-on-month for the first time in over a year; something we will keep a very close eye on. Meanwhile, casual wages rose 4.3% year-on-year.

Employment Hero’s data on quarterly wage growth in Healthcare/Community Services at 3.0% is significantly higher than the ABS data on Healthcare and social assistance at 1.7%

Despite wage gains, reduced hours are complicating the outlook, particularly for casual and part-time roles dependent on shifts or overtime. Average hours worked fell 6.0% year-on-year nationwide, with South Australia experiencing a sharp 9.6% drop. For employees, this reduction means that while wages are increasing to stay competitive, fewer hours are cutting into actual take-home pay, especially in roles where stable hours are essential.

This balancing act reflects the broader complexities of Australia’s labour market, as SMEs face rising wage pressures, adjusting hours to adapt to the cost of operating.”

The post The Complexities of Wage Growth: What Rising Pay and Falling Hours Mean for Workers appeared first on Small Business Connections.

 

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