Low wage growth is 'new black' for workers


The Bank has expressed confidence on a number of occasions that wage growth would improve, but that confidence will be tested by the weakness apparent in these numbers.

Across the nation, wages grew by 0.5 per cent quarter on quarter for a year on year increase of 2 per cent.

It will take into account the Reserve Bank's decision last week to again leave the cash rate at a record low 1.5 per cent and more signs of cooling across Australia's major housing markets, as well as renewed political instability from the citizenship debacle.

The wage price index for the September quarter - the Reserve Bank's and Treasury's preferred measure of wages growth - is expected to rise by 0.7 per cent for an annual rate of 2.2 per cent, the fastest pace in nearly two years.

The Australian dollar plunged after the figures were released, diving as low as 75.77 United States cents at 1306 AEDT, after trading at 76.29 U.S. cents just before the release.

The Fair Work Commission stunned business owners in June this year by announcing a 3.3 per cent rise in the minimum wage and minimum award rates - well above the current inflation rate of 1.8 per cent, effective from the new financial year.

Annual wage growth also came up short, rising by 2.01%, below the 2.2% level expected.

Even with tightening labour market conditions, wage growth is failing to respond.

In the private sector, wages rose 0.5% in the third quarter from the second quarter and rose 1.9% from a year earlier.

Western Australia recorded the lowest through the year wage growth of 1.3 per cent and Victoria, Queensland and Tasmania the highest of 2.2 per cent.

And he doesn't expect there'll be any meaningful improvement in wage growth for some time yet.