page_title: Wage growth
section_title: Australia
hierarchical_section_title: Wage growth / Trends / Australia
caption_attribution_description: English: This graph illustrates the significant change in wage growth between pre-GFC and post-GFC.
context_page_description: Wage growth is a rise of wage adjusted for inflations, often expressed in percentage. In macroeconomics, wage growth is one of the main indications to measure economic growth for a long-term since it reflects the consumer's purchasing power in the economy as well as the level of living standards. An increase in wage growth implies price inflation in the economy while a low wage growth indicates deflation that needs artificial interferences such as through fiscal policies by federal/state government. Minimum wage law is often introduced to increase wage growth by stimulating price inflations from corresponding purchasing powers in the economy. Wage growth can also be maximised through the development of industry factors by investing skilled workers in which decision made by businesses. More financial compensation for skilled workers not only lifts wage growth but stimulates higher market prices in the economy.
  While a weak productivity influences a low wage growth, identified a long-term factor, a short-term problem for low wage growth is often identified as the spare capacity in the labour market.
context_section_description: Despite the growing labour productivity in the recent five years, Australia has been experiencing stagnated wage growth in both the public and private sectors along with the global low-wage growth compared to the data in pre-GFC. The Treasury Australia argues that the recent flexible work style has contributed to the recent stagnated wage growth. As a result of increasing jobs in the service industries, more employment in part-time and non-routine jobs were created that affected the labour share of income. The Household Income and Labour Dynamics in Australian survey (HILDA) stated, "workers with a university education had higher wage growth than those with no post-school education over the period 2005-2010, but have since experienced lower wage growth than individuals with no post-school education." This can be explained as the introduction of minimum wage law not only creates slow growth in creating low-skilled jobs but also reduces the wage growth for high-paid workers due to the compensation for paying increased the minimum wages for the low-paid workers.
caption: This chart illustrates the wage growth of Australia in both public and private sectors comparing pre-GFC and post-GFC obtained data from the Australian Bureau of Statistics.[12] It  demonstrates the significant decline in wage growth after the GFC in both sectors in Australia.
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