The Agenda

Pay Transparency

Arising from the California Assembly Bill 168, employers in that State, upon receiving a reasonable request, must provide the pay scale for a position to an applicant applying for employment.
We understand that this pay initiative requires improved communication transparency in relation to California’s employers’ pay disclosure. We also understand that these initiatives will require employers to ensure:

• pay range alignment in recruiting
• pay transparency with employees
• establishment of pay bands or pay ranges reflecting work value relativity

Wage Increase in the US

While the US stock market reaches new highs, annual median base salaries in the US were only adjusted modestly in the 2017 year. According to Glassdoor Local Pay Reports, the annual median base pay across the US grew by 1.1% in the year to December 2017, reaching an amount of US$51,210 (A$66,500 approx.).
Glassdoor’s reports for the prior year revealed a rate of adjustment in the year to January 2017 of 3.5%. There is some evidence that with the growth in employment, those re-joining the labour market accepted below average wages in order to re-join the workforce.
The research reveals that the healthcare sector median base pay increased by 6.2% during the period, whereas those occupations impacted by automation and artificial intelligence were experiencing wage declines.


Graduate Employment Pressured on Disclosure

Australian Universities have welcomed recent research revealing that employers are satisfied with the quality of preparation graduates receive through their time at university. The research, drawn from the Government’s Quality Indicators for Learning and Teaching, shows that 83.6% of employers surveyed were satisfied with the university qualifications students were receiving.
Further, 88% of students surveyed were of the view that their degrees prepared them well or very well for the jobs they were seeking. These research outcomes are based on the views of over 3,000 companies.
According to the research, employer satisfaction had increased from 92% to 93.4% over the prior year with businesses revealing an improvement in graduates’ ability to adapt to the changed circumstances of the world of work, including their ability to work in teams.
Notwithstanding the general improvement in the employability of graduates, the Business Council of Australia, while acknowledging that local universities are for the most part world class, believes that a bigger issue was the relative emphasis on university versus vocational training for jobs, such as trades. Their Chief Executive, Jennifer Westacott, was reported as stating, “we don’t know if we are getting the best value for the $20 billion we are putting into VET and higher education each year.”
Clearly a key question for the Government is the continuing level of funding for universities and the balance of that funding between the university and VET sectors, and the alignment with employers’ needs.

Job Opportunities may be in Decline

During December 2017, newspaper and online job advertisements declined. This suggested that Australia’s labour market might be slowing down. The ANZ survey found a 2.3 per cent drop in job advertisements in December, whilst in November there was a 1.1 per cent increase.
David Plank, the Head of Australian Economics at ANZ, observed that the annual December holiday period often produced volatility in job advertisements for that month. He stated, “The labour market in 2017 was characterised by widespread job growth, particularly in full time jobs, an increase in participation and a fall in the unemployment rate to a four-year low of 5.4 per cent…[F]or this reason we are not unduly worried around the drop in December job ads.”
Plank, observing 14 consecutive months of growth, believes a period of moderation in jobs growth is likely, with a “continued improvement in labour market conditions over 2018, albeit at a slower pace”.

Gender Stereotypes Still Prevail in the 21st Century

Gender stereotypes remain prevalent within Australia’s workforce. Workforce participation for men is 71 per cent and for women, 57 per cent with male and female representation varying from modest to extreme within certain roles and sectors. According to ABS statistics, fourteen jobs have an extreme level of gender bias, with many of these jobs retaining a strong “tradition” in their imbalance.
According to the ABS, there are just four jobs in Australia that are equal, or close to being, equal, in gender representation.

These statistics suggest that cultural barriers may be the most significant influence on gender bias within jobs and sectors. For instance, among 149,000 primary school teachers only 15 % are male.

Similarly, women are equally unrepresented in trades roles. Of the 363,000 workers employed in Australia as metal fabricators, concreters, fitters, plumbers and electricians, only 4,000 are women.


Pay Increases in Decline

Employees in telecommunications, media, mining, retail and transport industries will probably struggle with the rising cost of living after signing wage rise agreements which could fall below inflation rates in two years’ time. The Department of Jobs and Small Businesses are finding that employers are not signing nearly as many agreements with their employees as they did three years ago.
Figures from the Australian Bureau of Statistics (ABS), reveal that wage increases remain at historically low levels. According to Cap IQ, current levels are close to 1941 wage increases, which was 1.9%.
Employees in the telecommunications, media, retail and transport industries signed agreements for 2 per cent increases in the three months to September.
According to the Sydney Morning Herald, over 3,000 Qantas flight attendants signed an agreement, which will increase their pay package up to 1.8 per cent a year. Similarly, more than 2,000 Ikea employees will only receive a wage increase of 1 per cent. The mining industry’s prior year’s average annual pay increase of 6 per cent is down to 1.9 per cent in the year to September. Across the States, the 206 agreements that were signed between 88,000 workers in the three months to September in Victoria reveal an average wage increase of 3.1 per cent.
found in Queensland, the ACT and Northern Territory that wage increase deals of 2.5 per cent were achieved whereas NSW was regarded as having the fourth lowest wage increases in Australia at 2.3 per cent. Workers in Western Australia, South Australia and Tasmania received the lowest pay rises in Australia.

Consumer Confidence Rises to a Four-Year High

Despite modest wage increases, recent retail spending data revealed that consumer confidence had risen to a four-year high.  ANZ-Roy Morgan Consumer Confidence Index rose 1.2 per cent to 123.5 in the week to January 14, which is the highest increase since October in 2013.
David Plank, ANZ’s head of Australian Economics, found that the rise of consumer confidence was primarily sponsored by the data on building approvals and retail sales.
The data concludes that approvals for the construction of new homes jumped by 11.7 per cent in November, which was primarily influenced by a rise in apartment and townhouse building in Melbourne.
Similarly, retail sales rose 1.2 per cent to $26.4 billion in November, seasonally adjusted – beating the 0.4 per cent rise which economists had predicted.

Employment and Unemployment – December 2017

Seasonally adjusted employment increased by 34,700 persons for the period November to December 2017. While this was lower than the 61,000 in November, it was more than double the forecast of the majority of economists.
We note in the December figures more than 15,000 were represented by full time employment, the balance being part time employment. On a trend analysis, full time employment rose by 322,000 in the 2017 calendar year and represented the majority of the jobs growth. Trend employment increased 3.3% which was above the average yearly growth of 1.9% over the past two decades and the highest since September 2005. The participation rate steadily increased to 65.7% though monthly hours of work performed per employee declined by 0.5%.
Notwithstanding the positive figures in relation to employment growth, on the basis of seasonally adjusted estimates, unemployment increased by 20,500 to 730,600, with the number of unemployed persons looking for full time work increasing by nearly 10,000 to marginally above 500,000. The unemployment rate increased from 5.4% to 5.5%.
The ABS Labour Force Commentary highlights these trend estimates.
Key releases in the coming months will be average weekly earnings statistics to November 2017 which are expected to be released on 22 February 2018. A guide to these statistics can be obtained through the following links – A Guide to Understanding Average Weekly Earnings and Average Weekly Earnings & Wage Price Index – what do they measure?