03 May 2002
The Quarterly Employment Survey and Labour Cost Index released today indicate that wages are only rising at a modest rate.
“Private sector wage increases have increased by 2.5%, around the same as inflation, which is at 2.6%,” said Peter Conway Council of Trade Union economist.
“The Labour Cost Index shows an even smaller increase in wages at 2% for the last year, although the average annual increase for wage rises observed in the March quarter was running at 4.2%”.
This indicates that consumer prices and skill shortages are having a minimal effect on wages.
Employment growth has also been steady rather than spectacular.
Peter Conway said that the statistics suggest that the Reserve Bank cannot use labour market pressures to justify a further rise in interest rates.
“It will therefore be interesting to see how the unemployment rate figures released next week impact on preparation for the next review of the official cash rate on 15th May,” he said.
“These figures also indicate that rather than employers looking to immigration policy to overcome skill shortages, more has to be done to lift wage rates and invest in skill development.”