Despite chief executives having bumper pay increases last year, the majority of Australian workers have seen their wages decline.
Figures released on Wednesday show the real value of wages has stagnated across the economy, with inflation and wages now growing at the same annual pace of 2.1%.
Wages had been keeping slightly ahead of prices since late last year but a rise in fuel prices, private health insurance premiums and tobacco excises in the June quarter has lifted headline inflation to match wages.
The most recent available data shows wages growing at 2.1% in the March quarter.
The headline inflation data also show that wages for the majority of workers have declined.
Workers in the private sector, who account for roughly 85% of the workforce, are experiencing wages growth of just 1.9%, which is well below inflation.
Workers in the public sector are experiencing annual wages growth of 2.3%.
The “underlying” rate of inflation – which removes volatility from the headline inflation figure – is 1.9%, which means the majority of workers’ wages have at least stagnated.
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The data comes after a report found this month Australia’s CEOs are doing better than ever, with pay up 12.4% for those running ASX 100 companies, to the highest level ever.
A survey by the Australian Council of Superannuation Investors found the median realised pay (the amount received including equity that vested during the year) for executives rose to $4.36m in financial year 2017.
That was partly due to strong equity markets – some executives’ bonuses are paid in shares or linked to the share price. Bonuses were up 18% – one in three ASX 100 CEOs received 80% of their maximum bonuses, while the median payout was 70.5%.
But the council expressed qualms that the bonuses seemed to be routinely paid and in many cases were not a true performance incentive.
The shadow minister for employment, Brendan O’Connor, and Sally McManus, the secretary of the Australian Council of Trade Unions, have both pointed out how poorly the average workers’ wages are performing.
“When the system is out of balance and big business has too much power, this is what happens,” McManus said on Wednesday. “Balance needs to be restored so working people can win the pay rises they deserve.”
Economists say the weak inflation figure means the Reserve Bank will keep the official interest rate at a record-low 1.5% for some time yet.
Commonwealth Bank economist Michael Blythe said the RBA was unlikely to lift interest rates before early 2019 at the earliest.