Australian Workers May Receive Smaller Pay Rises

While the Australian economy is still not improving, a new research has indicated that workers are to expect smaller bonus and pay rises in the next few years.

For this financial year, for instance, pay rises are expected to average at 3.5% only, which consulting firm Hay Group says is probably the slowest wage growth many Australian workers could receive since this financial crisis started.

This report comes as the data regarding the labour force was released, indicating that the jobless rate slightly grew from 5.5% to 5.6% last month, while no new positions are being offered. The jobless rate is expected to go up to at least 6% by the end of the year, as experts say, population size will not be able to meet with the lack of demands, with no new jobs being created.

Business and consumer confidence, however, remain steady all these months, and perhaps showed a bit of improvement compared to the beginning of the year. But this can still affect pay rises.

Says an analyst from the Hay Group, “The prevailing weaker business confidence has resulted in a more conservative approach to salary movements. Workers expecting increases to be similar or even higher than in recent years may be disappointed.” Even as this may be the case, conditions in the Australian domestic job front is still a lot better compared to other developed nations like the UK, the US and even New Zealand.

Part of the reason for the slow wage growth is attributed to the pullback of a few mining investments. “Last year, the moment the resources sector pulled back of some of those projects and investments, it had a really wide-ranging impact. It’s that wide-ranging impact that affected the rest of the economy really really quickly, which has in turn affected the forecast for the increases over the next year,” says a Hay Group senior consultant.