After more than a decade of sub-4% growth in pay, Treasury has projected in its Intergenerational Report, released today, that it will return to that level in 2028 as productivity resumes its long-term growth path of 1.5%.
Bargained wage rises in the private sector show little sign of pushing towards the "materially higher" benchmark set by the RBA, growing at 2.6% for the second quarter in a row, while public sector bargaining collapsed.
The ABS has delivered a small boost to hopes that wages growth might exceed restrained government projections after today's quarterly figures showed an annual lift of 1.5% across the economy.
Pay rises in private sector agreements approved in the June quarter reached 3% for the first time in 18 months, despite the effects of the coronavirus pandemic, according to Attorney-General's Department data bedevilled by an inability to quantify increases for 76,000 workers.
Private sector pay rates excluding bonuses increased by 0.1% seasonally adjusted and 0.5% in original terms in the September quarter, according to the ABS.
A UK proposal to cap wages at £100,000 ($180,000) to finance low- and middle-income-earners' increases is not the best way to redistribute incomes and lift living standards, according to the Centre for Future Work, which says that targeting soaring corporate profits is "more powerful".
Bargained private sector wage rises recovered to near three-year highs in the March quarter, before they felt the effects of the coronavirus pandemic, according to the Attorney-General's Department.
