Reserve banknotes from researchers at the University of Melbourne show who gets the most likely pay rise
The Australians who are most likely to receive a pay raise are usually younger and work in management, new research shows.
The Reserve Bank of Australia held a conference in April to investigate why wage growth has been weak for five years.
Salary increases halved between 2011 and 2017, to a meager two percent.
This week, the RBA released a series of articles from that seminar that investigate why Australians are missing out on meaningful wage improvements.
Among them was a study by researchers from the University of Melbourne, Guyonne Kalba and Jordy Meekes, who said that age and education – but not necessarily gender – were important factors in determining whether someone received a salary increase.
The Australians who are most likely to receive a pay raise are usually younger and work in management. Experts say that gender played no role (depicted in a young woman in the office)
Casual employees, workers, catering staff and even university graduates are doing particularly badly.
& # 39; The age of the employee is important in explaining wage growth, consistent with the literature on wage growth throughout the life cycle that suggests that wage growth is higher at the beginning of the career, ie at a younger age & # 39 ;, University of Melbourne paper said.
& # 39; Gender appears to be less important for wage growth, particularly when checking employee job characteristics. & # 39;
Traditionally, those with a university degree enjoyed a stronger wage increase.
This seems to have changed since the global financial crisis ten years ago.
& # 39; With regard to education, it is mainly university graduates who experience higher wage growth than employees with a different level of education, although this has been less in recent years & # 39 ;, their paper said.
& # 39; The positive relationship between education and wage growth was greatly reduced after GFC. & # 39;
Researchers from the University of Melbourne, Guyonne Kalba and Jordy Meekes, discovered that workers and machine operators are struggling with stagnant wage growth (depicted are male construction workers in central Sydney)
Since the GFC, loose employees also suffer from weaker wage increases.
Workers and machine builders have experienced stagnant wage growth since 2005, three years before the start of the GFC.
The elite minority of Australians who have enjoyed significant wage increases in the last five years worked in management or in the financial sector.
& # 39; Employees with occupations that are more cognitive and less routine, such as managers and occupations, experience relatively high wage growth from 2014 & # 39 ;, according to the research report.
& # 39; Employees in economic sectors that produce marketable products experience higher wage growth, while employees in the accommodation or agriculture sector in particular are lagging behind. & # 39;
The wage price index, as measured by the Australian Bureau of Statistics, has not increased by more than 2.5 percent since the beginning of 2014, so that the salary increases are at a level far below the long-term average.
The elite minority of Australians who have enjoyed a significant pay rise in the last five years worked in management or in the financial sector (pictured here is the Australian Securities Exchange in Sydney)
Professor Kalb and Dr. Meekes said that a continuation of fixed wages would have serious consequences in the long term.
& # 39; Continued low wage growth at the individual level, especially for people on low incomes, may have a social impact, & # 39; they said.
& # 39; However, this is not evident in the short term. & # 39;
JPMorgan, chief economist Sally Auld, said fixed wages would also make it harder for home loans to repay their mortgage, with economic growth in Australia at the weakest level in a decade.
& # 39; Usually you will find that the overdue rates increase as economic conditions weaken, & # 39; she told the ABC & # 39; s 7.30 program on Tuesday.
& # 39; The fact that the arrears in rates are on the rise probably speaks of a sustained low growth in income, so overall, income growth in the economy is about half the long-term average. & # 39;
Dr. Auld said the overdue mortgage interest rate, with borrowers lagging behind for a month or more on their repayments, is likely to rise in the next six to twelve months.
& # 39; Mortgage holders now generally use a larger portion of their income to repay the mortgage & # 39 ;, she said.
& # 39; It is not really our opinion that income growth will attract a great deal, so this trend increase in arrears is likely to continue. & # 39;
. (TagsToTranslate) Dailymail (t) news