ABS update: annual wage growth in June quarter 2020

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The ABS reports that the seasonally adjusted Wage Price Index (WPI) rose 0.2 per cent in the June quarter of 2020, and 1.8 per cent throughout the year. This was recorded to be the lowest annual growth in the last 22 years over the history of the WPI.

COVID-19 has been an influence in the low growth, as the June 2020 quarter was the first full period in which COVID-19 restrictions were captured in the WPI. The WPI rise in the June 2020 quarter can largely be attributed to the public sector, which rose 0.6 per cent. The private sector wage growth was only 0.1% as businesses adjusted to changes within the economy.

Wages did not change in the June 2020 quarter in original terms. Public sector wage growth, which was 0.4 per cent offset the private sector fall, which was -0.2 per cent. This fall in the private sector can be attributed to the large amounts of wage reductions across senior executive and higher paid jobs. This was recorded to be the first negative wages result in the long history of the WPI.

South Australia and Tasmania had the highest growth through the year with a 2.4 per cent rise. On the other hand, Western Australia had the lowest wages growth at 1.6 per cent.

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