Australians who work from home in white-collar jobs are missing out on decent pay rises, new SEEK data shows.
The bad news comes as unemployment hit a 48-year low of 3.5 percent in June, with the Australian Bureau of Statistics also revealing on Thursday that 32,600 jobs had been created.
Historically low unemployment rates aren’t translating into decent pay increases for everyone.
Matt Cowgill, a senior economist at the employment website SEEK, said wages for white-collar professionals working from home were the weakest this year, despite rising labor demand.
“If we look at advertising salary data by industry, the slowest growth is in industries like advertising, art and media, public sector, consulting and strategy,” he told Daily Mail Australia on Thursday.
‘These are white-collar professional industries where people are usually able to work from home, at least some of the time.’
Australians who work from home miss out on modest pay rises with new data showing pay rises have peaked as interest rates rise (pictured: Sydney woman working remotely)
Salaries advertised on job website SEEK rose 4.8 per cent year-on-year since April, but salary levels in the marketing and communications sector rose just 1.6 per cent.
Advertised salary hikes have peaked
June: 4.5 percent
May: 4.7 percent
April: 4.8 percent
March: 4.7 percent
February: 4.5 percent
January: 4.4 percent
December: 4.7 percent
November: 4.4 percent
October: 4 percent
September: 3.7 percent
August: 3.8 percent
July: 4.1 percent
Source: SEEK Annual Wage Increase Advertised Pay Index
Consulting and engineering fared worse with just a 1.4 percent increase, while government jobs offered a modest pay rise of 1 percent.
Advertised salary increases on the SEEK website appear to have peaked, slowing to 4.7 percent in May and 4.5 percent in June.
Workers are effectively suffering a reduction in real wages as inflation rises to 5.6 percent.
The low unemployment rate means the Reserve Bank of Australia could raise rates again, with incoming governor Michelle Bullock warning last month that it would make it harder to control inflation.
“If unemployment stays too low for too long, inflation expectations will rise, making it much harder for monetary policy authorities to bring inflation back down,” he told the Australian Industry Group in Newcastle.
‘There is a risk that if inflationary expectations tighten and wages respond to that and wage demand responds to that, we end up in a situation where it is very difficult to reduce inflation.’
Rising interest rates have also reduced the ability of employers to offer large pay raises to new workers.
‘It seems so, yes,’ said Mr Cowgill.
‘We’ve seen really pretty fast advertised salary growth through 2022 and that’s been reduced.’
But Mr Cowgill said it was too early to predict layoffs for white-collar workers as the economy slowed.
‘It’s still so new, post-pandemic, this kind of work-from-home dynamic or hybrid-work dynamic that I don’t think anyone can be very confident in predicting how it’s going to shake out,’ he said.
The Australian Bureau of Statistics released on Thursday (photo by Barista in Sydney)
‘It’s still a really tight labor market, with unemployment still in the mid-three per cent range, the lowest we’ve seen since the mid-1970s until last year.’
Despite the slowdown, Mr Cowgill said changing jobs was still a good way to get a pay rise, with salaries advertised on SEEK rising at a much faster pace than the official 3.7 per cent wage price index.
‘The best way to get a pay rise is to get a new job,’ he said.
‘When you stay in the same job for a long time, people don’t need to redefine at least some roles to reflect additional accumulated skills and experience.
‘Maybe they get an annual bump that reflects inflation and the like, but when you go for a new job, it might better reflect your accumulated skills and experience.’
While unemployment is low, the underemployment rate of 6.4 percent, with workers seeking more hours, is 0.6 percentage points higher than last year’s low.
ANZ chief economist Adam Boyton said it suggested job growth was slowing.
“The slowdown in economic activity suggests that employment growth and growth in working hours should cool materially in the coming months,” he said.
Low unemployment means the RBA could raise rates again, with incoming governor Michelle Bullock warning last month that it would make it harder to control inflation.
Mr Boyton said job adverts and business confidence data suggested ‘the unemployment rate will be higher in the coming months’.
Mr Cowgill said that while there was no evidence of a wage-price spiral, the unemployment rate would need to rise for inflation to return to the Reserve Bank’s two to three per cent target.
‘No one can tell you with a high degree of confidence that the number is 4.5 per cent or 4 per cent or 5 per cent or something in that range’.
“I think Governor Bullock’s comments early on were fair in the sense that, I suspect, he’s probably right that if unemployment stays at current levels, in the medium term, for an extended period of time, we’re going to see wages rise.” Growth will pick up more than currently expected and may rise to unsustainable levels.’
The June data covers the period before the 8.6 per cent increase in the minimum wage on July 1 for Australia’s 184,000 lowest paid workers.
This came as award wages rose 5.75 percent for another 2.67 million employees.
Inflation data for the June quarter, due out on Wednesday next week, could give a better indication of whether the Reserve Bank will raise rates again in August.
Read Full News Here