WA hit hard by falling wages

Image by Shutterstock.
Image by Shutterstock.

Research conducted by the Centre for Future Work found wage growth in all parts of the country fell to historic lows and that WA and QLD were hit especially hard.

In their analysis using data from the Australian Taxation Office, the Centre for Future Work found real wages fell 5 per cent in WA over four years.

In the area of Forrest, which includes Bunbury, Busselton, Dunsborough, Margaret River, Augusta, Nannup, Capel, Balingup, Dardanup and Harvey wages fell 5.23 per cent.

The area of O'Conner, which includes Esperance, Collie, Albany, Kalgoorlie-Boulder, Boyup Brook, Bridgetown-Greenbushes, Brookton, Coolgardie, Corrigin, Denmark, Dundas, Kondinin, Laverton, Manjimup, Ngaanyatjarraku, Wandering and Williams, wages performed better than the state but still fell 3.15 per cent.

Centre for Future Work economist Jim Stanford said analysis of ATO data confirmed that Australia's wage crisis has been worse than what was reported by the Australian Bureau of Statistics.

ABS wage price index, released on Wednesday, found that WA recorded the lowest quarterly rise of 0.3 per cent in its March quarter analysis for 2019.

Rises through the year ranged from 2.7 per cent for Victoria to 1.6 per cent for WA, which for WA extended the period of lowest state growth to four quarters.

The ABS used information collected from a representative sample of employee jobs within a sample of employing organisations.

Dr Sanford said the ATO statistics allowed calculation at a level of detail that was not possible with other data sources.

Cost of living hurting WA households and small business

He confirmed that real wages have been declining more than 5 per cent in WA, which meant living standards were also declining.

"Wages everywhere in Australia have performed very poorly, but some regions have been especially hard-hit," he said.

"Communities in regional WA and Queensland have been among the hardest hit of anywhere in the country.

"Public anger over cost-of-living issues is justified, given this hard evidence that real wages in these communities have fallen."

In parliament this week, Vasse MLA Libby Mettam revealed 141,000 households in WA were experiencing mortgage stress, which was up from 85,000 last year.

Ms Mettam said there were 31,000 WA residents who were on the hardship program, 12,000 were repaying debt, there had been 20,000 utility disconnections and a 10.6 per cent increase in bankruptcies.

She said thousands of small businesses in WA were facing economic hardship and that 30,000 small businesses had closed.

"So far under the Labor government we have seen an increase of $700 a year in household fees and charges, and I understand that will now increase to more than $860," she said.

Reduction of full time work

The Centre of Future Work found real wages have been undermined in Australia by the expansion of part-time work, temporary jobs, labour-hire positions, and 'gigs' - but these impacts were not captured in the ABS's wage price index.

"Since the wage slowdown took hold in 2013, wage growth has averaged around 2 per cent per year - the slowest sustained period of wage increases since the end of WWII," said Dr Stanford.

"Moreover, the modest rebound in wage growth experienced over the past year is mostly due to the strong 3.5 per cent boost to the national minimum wage implemented on July 1, 2018.

"That increase immediately lifted pay for more than one in five Australian employees, including those whose wages were set under the awards system.

"For workers who didn't get that 3.5 per cent increase in July, average wages were still growing at barely 2 per cent.

"Any signs of hope in overall wage growth are due to the deliberate policy action of the Fair Work Commission, not to automatic market forces.

"Australians cannot wait for wages to start rising of their own accord. This evidence confirms that higher minimum wages are a powerful tool for lifting wages."

UnionsWA secretary Meredith Hammat said in the face of rising costs of living, ABS figures showed that working West Australians were experiencing the lowest pay rises of any state or territory in the nation.

"These figures are a timely reminder that working people in WA are finding it harder and harder to keep up with rising living costs," he said.

"Our workplace relations systems, including federal laws and WA State Government Wages Policy, need to change to ensure that pay rises keep pace with costs of living."

WA's industrial relations minister Bill Johnston said wages in the private sector in WA were overwhelmingly regulated by the Commonwealth Government.

The federal Department of Jobs and Small Business could not comment on what factors were driving WA wages to fall during an election period.

A coalition campaign spokesman said the unemployment rate in WA had fallen 0.3 percentage points over the past year and there had been almost 50,000 jobs created since the last election.

Have your say: Have you experienced a wage fall in recent years? Is the cost of living hurting your household? If you have something to say on this issue please email editorial.bdmail@fairfaxmedia.com.au.