Australian workers are beginning to recover from the cost-of-living crisis, as wages grew faster than inflation for the first time in years. The latest data from the Australian Bureau of Statistics shows hourly pay rates rose by 3.4% in the year to March, compared to a 2.4% increase in prices.
This 1% real wage growth is the fastest in five years and double the average rate seen before the pandemic. Treasurer Jim Chalmers welcomed the figures, saying the government’s policies are helping to ease pressure on households, though he acknowledged more work remains.
The public sector led the recovery, with wages rising 3.6%, driven by new enterprise agreements and pay increases for aged care workers. Private sector wages grew by 3.3%. Despite the positive data, economists noted the growth remains in line with Reserve Bank expectations and is unlikely to delay an expected rate cut.
The government is preparing to argue for an above-inflation increase to the minimum wage ahead of the Fair Work Commission’s decision. Unions are pushing for a 4.5% rise, while business groups advocate for around 2.5%.
However, a new OECD report highlights that Australian household disposable incomes fell by 1.1% last year, the worst result among 20 analysed countries and the third consecutive annual decline. The data suggests that while real wages are improving, broader living standards have yet to fully recover.
