Wage Growth

We all know that every conversation around this here parts of the forum includes discussion around wage growth.
The very valid argument is once IR and Government intervention dry up then how can prices sustain without wage growth.

I have raised my concerns with wage growth due mostly to automaton, AI and the very little talked about substitution of wage growth for work/life balance.

However I’m curious to know how people around these here parts have been effected by wage growth or lack there of?

Me personally the past 4 years have been the best of my life. I worked out that I have roughly enjoyed 15% growth compounding year on year.
Curious to know if I was just lucky I have started to speak to a few friends about this. Every single one of them has been the same! Admittedly quiet a few of these are self employed and have enjoyed sizably more growth (which is interesting given our economy is doomed isn’t it??).

But perhaps it’s just an age and industry thing. So that’s why I’m curious to know what those around these here parts are fairing?

 

We are negotiating a new EBA and finding it hard to get more than a 2.1% per year increase (despite a lot more productivity).

Also, the employer is trying to force a 4-year EBA instead of the usual 3-year one.

Without the union, we’d be completely screwed.

 

Are you talking 15% pay rises, for the same responsibility and doing the same work you were doing last year?

 

My wage has grown about 50% in the last 4 years.
But this did include promotions.

Within my industry there is still wage growth and it is very strong. Commercial & Government base Construction work

 

I have my PAYG job and that has accounted for around 8% of the YOY on growth. I decided to approach my manager and ask for a change of role and in doing so created an opportunity to continue to upskill and earn some valuable certifications.

The other 7% came from a side hustle that has been enjoying continued growth as well.

The side hustle would never have been possible without work/life balance which has always been one of my arguments regarding wage growth.
5 years ago I asked to go part-time so I could develop new skills to make it possible.

So whilst I do believe wage growth is an issue. I also believe there are endless opportunities for those that want to utilize this new work/life balance that exists.
I do also appreciate that work/life balance isn’t available in every occultation. It’s a lot harder in blue collar work.

 

The way you've approached wage growth is clearly going to far exceed market growth. That certainly isn't the reality for many out there nor have they got the capability to take advantage of opportunities out there to "create" wage growth.

I observe things at a corporate level where the market expects continued profit growth and as a result (generally speaking) everyone is trying to take cost out to meet targets. Constantly downgrading pay bands of roles, removing headcount, less variable pay etc. I think these all have a big impact on the wage growth numbers.

 

Have had 4-6% rise ea year for the last 5yrs.
Partner has had 2.5-3% just about every year.
Friends have had 2%+ increases yoy, everything from warehousing to freight to chemicals to paint.

Not to mention what I’m paying for trades per hr rate..

I haven’t really seen a lack of wage growth in any of my circle’s and it’s quite broad.

 

2.5% this year. Been getting and will be getting 2-2.5% for the foreseeable future despite good reasons for more.
I can achieve my financial goals with these increases, not that my specific circumstances should have a bearing on my wage growth.

That sounds like some funky math; 8% p.a. growth + 7% p.a. growth doesn't equal 15% unless I have misread something.

 

OK - so just 2% a year for your payg job...

When I think of ‘wage growth’ I don’t usually consider it includes getting a promotion or a second job - rather, did your annual salary for your required hours on your usual job go up?

I worked two jobs for several years - but didn’t consider it ‘wage growth’ in the EBA sense (I certainly earned more - but it was because I had two jobs not because my hourly rate increased).

 

My wage is down a little bit compared to 4 years ago.

 

I haven't had much wage growth over the last few years. I should e-mail the boss to see if I'm overdue for one..


Dear self.........

 

"occultation"

Seems creepy.

 

Wage growth is more like an increase in hourly rate for performing materialy the same job.
It should be separated from the increase earnt through promotion, taking on a second job/working more hours.

 

High level, real wage growth economy wide is a function of productivity improvements made by employees over time.

Therefore, another way to look at it, is by asking how have you increased your value to your employer over the year. Your wage, should measure that improvement. In @albanga's case, it appears as though there's been clear efforts being made to improve contribution over time, and that has led to a healthy wage rise over time (congrats!).

If your value, contribution, skills, etc all remains the same, then real wage growth should really be nil in a well functioning labor market. On its own, wage growth is not a workplace 'entitlement' . The labour market system isn't designed that way.

Typically though, nobody and no business stands still over long periods. So wages should rise, as productivity improves from using more capital, increasing skills, etc etc.

 

4% per year increase but pay freezes are now coming. Massive financial losses and hundreds more will loose jobs shortly as tuff economic times are here. I'm hopeful the company will survive but for the first time since the gfc I'm preparing my cv just in case I'm next.

 

I’m not sure that 2% a year is a super ‘healthy’ wage increase.

And, unfortunately, in the real world, wage growth doesn’t necessarily track productivity.

For some jobs, wages aren’t easily linked to productivity at all. For e.g.there is a limit to the ratio of childcare staff to babies at a childcare centre so a worker can’t increase productivity by looking after any more kids at once.

Workers are told to ‘upskill’ as a proxy for productivity, but that’s a law of diminishing returns...how many degrees are required to look after a toddler...?

If wages don’t at least equal CPI increases then an employee is going backwards for the same productivity. A fair wage for a fair days pay certainly is a workplace entitlement.

 

I meant a combined 15% increase between my PAYG and self employed business. So if I was on 100k then the first years 15% was 15k with 8k from a PAYG salary increase and 7k from self employed income.

Next year my combined salary would be 115k so another combined 15% on top of that and so on.

 

This is an interesting preliminary exploration of potential causes of low wage growth using micro data - from the RBA’s April 2019 conference that focused on low wage growth.

https://www.rba.gov.au/publications...nce-2019-andrews-deutscher-hambur-hansell.pdf

 

He does the devil's work.