The economic fallout from the COVID-19 pandemic isn't limited to zero-bound interest rates, ballooning government debt, and cratering share prices for ASX travel and leisure shares.
Australia's unemployment rate has risen too, despite many jobs being spared by the government's JobKeeper program.
Data from the Australian Bureau of Statistics (ABS) revealed that the unemployment rate in September, the latest month available, increased to 6.9%. Meanwhile the labour participation rate, people who are working or actively seeking work, fell to 64.8%. The underemployment rate – people who are working but would like to work more hours – also increased to 11.4%
And Australians who are working aren't likely to have seen much, or any, of a pay rise.
The latest ABS Wage Price Index (WPI), released today, indicated the seasonally adjusted WPI rose just 0.1% in the September quarter. That brings the year-to-date growth down to 1.4%.
Addressing the results, Andrew Tomadini, Head of Price Statistics at the ABS said:
The September quarter is generally a quarter of solid wage growth, however, the impacts of the COVID-19 pandemic contributed to a subdued rate of wage growth in September quarter 2020.
Organisations continued to adjust to the economic uncertainty, recording fewer end of financial year wage reviews and delaying enterprise bargaining agreement increases. This led to a significantly reduced number of jobs recording wage rises when compared to previous September quarters.
Additionally, the staggered implementation schedule of the Fair Work Commission annual wage review moved some regular September quarter wage rises to later quarters.
The ABS notes that most of the private sector wage growth can be attributed to companies restoring wages to normal (or near normal) levels after cutting wages in the June quarter.
South Australia, where until this week the coronavirus had been largely held in check, notched up 1.8% in year-to-date wage growth, the highest of any state or territory.
Victoria, which only recently emerged from months of strict lockdowns after successfully suppressing new community transmissions, recorded the lowest wage growth, at 1.2%.
As Tomadini noted:
September quarter 2020 covers the period when COVID-19 restrictions were impacting parts of Victoria but had started to ease across the majority of other states and we can see the impacts of this in the data.
With several highly promising vaccines underway and Australia largely managing to keep the virus in check, we can all hope for a return to higher wage growth next year.
