Australian wages in the March quarter recorded their first decline since the fall during the September quarter of 2009, and we all know what was happening then.
Granted it was only a small fall of 0.1% seasonally adjusted, but it highlights the enduring headwind that low wages growth poses to the recovery in consumer sentiment, spending and the overall domestic economy.
So, the good news is that in the break up of this data there is some evidence that the sectors that are benefiting from low interest rates and a lower Aussie dollar are reaping some rewards. Of course those sectors with little pricing power or still suffering fallout from the mining boom and manufacturing slowdown remain pressured.
Looking across the various industries the ABS reported:
Mining fell 2.6%, manufacturing dipped 0.9%, wages for finance and insurance workers dropped 3.5%, those employees in Rental, hiring and real estate saw their wages drop 2.2%, professional, scientific and technical services fell 1% while those working in the arts saw their wages drop 3.1% seasonally adjusted. Workers in ‘other services’ saw their wages fall 0.6% while workers in wholesale trade’s wages remained steady.
None of that is unexpected in this economic landscape.
But the winners are showing that easy monetary conditions in Australia, rates plus a lower Aussie dollar, are starting to gain some traction.
The big winner was education and training which rose 6.5%. But it’s the result for retail trade workers whose incomes grew 3.5%, accommodation workers who earned 2.4% more, and transport, postal and warehousing workers whose salaries rose 1% which suggests the domestic economy might be doing better.
Other winners were Electricity, Water and Gas which rose 0.4%, construction was up 0.6%, and information, media and technology rose 1.5%, health care workers were fairly steady up 0.2%.
Overall it’s a disappointing headline. But the underlying story could be one of the economic transition Australia needs.