More Job Opportunities, But Growth In Workers’ Earnings Remains Subdued
Westpac McDermott Miller Employment Confidence, December quarter 2021
The Westpac McDermott Miller Employment Confidence Index rose 1.2 points in the December quarter, to a level of 106.9.
This was the sixth straight rise in the index since the Covid-19 lockdown in 2020.
Michael Gordon, Acting Chief Economist for Westpac, noted that the rise in the index has largely been driven by perceptions
about current job opportunities. “Even with the Covid restrictions in place over recent months, the number of online job advertisements stayed well above pre-pandemic levels.”
However, fewer households reported a rise in earnings over the past year, and they were less confident about future earnings growth.
“The labour market is set to be one of the most fascinating economic stories of 2022”, said Mr Gordon. “Both workers and businesses recognise that the jobs market is drum-tight at the moment. And while we would expect upward pressure on pay rates to follow, workers aren’t saying that they’re seeing it yet.”
“Wage growth tends to lag the broader economic cycle, so perhaps this is the shoe that’s yet to drop as inflation pressures become more entrenched,” said Mr Gordon.
“Confidence amongst employees working in the public sector has risen again this quarter, up 5.3 points to 115.3. This is in stark contrast to private sector employees whose confidence has dropped 2.2 points to 102.0,” observed Imogen Rendall, Market Research Director of McDermott Miller Limited.
“Those in the private sector continue to be concerned about their personal job security and fewer have reported growth in their earnings over the past year. In comparison, public sector employees see their roles as secure and view their employment conditions both now and in the future in a much more positive light,” commented Ms Rendall.
A full description of the background and specifications of the survey are attached. The survey was conducted over 1-12 December 2021, with a sample size of 1,558. An index number over 100 indicates that optimists outnumber pessimists. The margin of error of the survey is 2.5%.