Why you could finally be in for a wage rise next year as Josh Frydenberg makes a startling prediction about unemployment levels
- Treasurer Josh Frydenberg forecasting pre-pandemic unemployment by 2022
- Jobless rate was 5.1 per cent in February 2020 rising to 7.5 per cent by July 2020
- It fell back to 5.6 per cent in March 2021 with job vacancies at a 12-year high
Australians could finally get a decent pay rise from next year with Treasurer Josh Frydenberg dropping a key hint.
Wages last year grew by just 1.4 per cent and have been at below-average levels under 3 per cent since 2013.
Nonetheless, Mr Frydenberg is expecting Australia’s unemployment rate to get back to pre-Covid levels by as early as next year, counting from the start of the pandemic.
‘In stark contrast, following this recession, we are on track for the unemployment rate to recover in around two years,’ he told the Australian Chamber of Commerce and Industry.
Australians could finally get a decent pay rise from next year with Treasurer Josh Frydenberg dropping a key hint. Pictured is Sydney Broadway Shopping Centre supervisoer Kitty Ruce
The government, via the May 11 budget, is aiming to take the jobless rate below 5 per cent for the first time since the start of the Global Financial Crisis in 2009.
Australia’s jobless rate stood at 5.1 per cent in February 2020, a month before the Covid lockdowns, but by July last year, it rose to 7.5 per cent – the highest level since November 1998.
In March, the jobless rate fell to 5.6 per cent from 5.8 per cent a month earlier as JobKeeper wage subsidies finished, Australian Bureau of Statistics data showed.
AMP Capital chief economist Shane Oliver said Australia’s jobless rate would have to fall closer to 4 per cent for wages growth to return to levels above 3 per cent.
But he said residential construction, transport infrastructure and manufacturing jobs were likely to see decent wage increases much sooner.
‘Some sectors might see pretty good growth,’ Dr Oliver told Daily Mail Australia.
Treasurer Josh Frydenberg is expecting Australia’s unemployment rate to get back to pre-Covid levels by as early as next year, counting from the start of the pandemic
Australia’s labour market recovery is certainly a lot quicker than the previous recession of 1991, with job vacancies in March 2021 soaring to a 12-year high.
The number of jobs advertised on the internet last month stood at 238,700 with the count of available positions almost doubling since the Covid lockdowns in March 2020, the National Skills Commission revealed.
Three decades ago, unemployment continued to climb after the 1991 recession, hitting a six-decade high of 11.2 per cent by December 1992.
Australia’s jobless rate didn’t drop below 6 per cent until August 2003 or drop under 5 per cent until August 2005.
AMP Capital chief economist Shane Oliver said Australia’s jobless rate would have to fall closer to 4 per cent for wages growth to return to level above 3 per cent. But he said residential construction, transport infrastructure and manufacturing jobs were likely to see decent wage increases much sooner. Pictured is a Melbourne house under construction
From December 2005 until the GFC, wages growth was consistently above 4 per cent.
The Reserve Bank of Australia governor Philip Lowe has promised to leave interest rates on hold at 0.1 per cent until 2024 ‘at the earliest’ arguing wages needed to increase first.
‘For this to occur, wages growth would need to be materially higher than it is currently,’ he said.
‘This would require significant gains in employment and a return to a tight labour market.’
