New data reveals the Australian jobs in which workers received the biggest wage jumps in 2023.
The Wage Price Index (WPI) measures changes in the prices of labour, unaffected by compositional shifts in the labour force, hours worked or employee characteristics.
The new data was updated on Wednesday to include information from December last year.
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The WPI rose by 4.2 per cent in 2023, with 0.9 per cent of that increase in the last quarter of the year.
More jobs had larger average yearly wage increases in 2023 than in 2022 — of all jobs that recorded a wage change over the previous 12 months, 64 per cent had an annualised increase above 3 per cent compared with 45 per cent of jobs in December 2022.
Healthcare and social assistance jobs had the biggest wage increase, with 5.5 per cent growth.
Education and training followed with an average 4.8 per cent pay rise.
Administration and support services had an average increase in wages of 4.5 per cent.
Retail workers gained a 4.3 per cent increase in wages, while manufacturing jobs wages rose by 4.2 per cent.
Construction workers had an average increase in pay of 4.1 per cent, as did those in the mining industry and those working in transport, postal and warehousing jobs.
People working in information media and telecommunications jobs, and in the accommodation and food services industry, had an increase in pay of 4 per cent.
Workers in the arts and recreation services industry, as well as those working in professional, scientific and technical services jobs and in rental, hiring and real estate services job, all had an increase in wages of 3.8 per cent.
People working in electricity, gas, water and waste services jobs had wages increase on average by 3.7 per cent, while workers in the public administration and safety industry saw their pay increase by 3.6 per cent and financial and insurance services had an average increase in pay of 3.2 per cent.
Cost of living crisis continues
This wages growth outpaces inflation for the first time in three years, but experts say there is more to the story.
“It tells us next to nothing about what’s happening to buying power,” Australian National University economist Peter Crawford said.
In September 1998, the way the Consumer Price Index (CPI) was calculated changed. Crucially, it removed mortgages and other interest payments from the equation.
“The index actually does a pretty good job of measuring changes in living costs at times when mortgage rates aren’t much changing,” Crawford said.
“But at times when they are tumbling, it’ll overestimate living costs.”
The Bureau of Statistics publishes a separate set of measures called the “living cost indexes” — these include mortgages and other interest charges.
“While the CPI … increased 5.4 per cent in the year to September, the living cost index for households headed by wage earners climbed 9 per cent,” Crawford said.
“For these working households, the price of food climbed 4.8 per cent in the year to September, the price of electricity 14.5 per cent and the price of mortgage interest charges 68 per cent.
“It’s the increases in mortgage rates that have made the increases in the other prices hurt so much.
“The overall increase in prices faced by wage-earners — 9 per cent — is way above the typical wage increase of 4 per cent.
“On this measure, the correct one, the buying power of wages has been falling for two-and-a-half years.”
Both the CPI and living cost indexes are set to be updated in the coming weeks.
Crawford noted mortgage rates seem set to begin falling this year, but urged the federal government to put in place measures to address the cost of living crisis.
“We need them because we really are in something of a crisis,” he said.
“Things are a lot worse than the official index suggests.”