Posted by Next Big Futures on February 11, 2019 16:00:22With the cost of goods and services (CGS) inflation expected to reach 1.8 per cent next year, the average cost of labour is set to increase by 0.6 per cent, the Bureau of Statistics (BoS) has reported.
The average cost per hour of work has risen by 0 and 0.3 per cent respectively, the BoS has said.
Inflation has been a major factor in the recent sharp fall in wages, which hit the lowest levels since the global financial crisis.
The BoS said in a release yesterday that it was concerned about the impact of wage restraint on households.
“Wage restraint may have contributed to some of the increase in employment, particularly in the service sector, and this has contributed to inflationary pressures on wages,” it said.
However, the ABS said that it had been unable to provide data for the cost to the economy of wages and wages inflation, which was the main reason for its survey.
“We have identified two factors that may have affected the accuracy of our cost of wages survey,” the BoA said in the release.
“These factors are: (1) the large number of survey questions that are asked about inflation in real terms and the large quantity of data for which data is available, as well as (2) the use of a non-inflation index for which we have no information.”
The survey also used a non inflation index of the economy’s growth rate to measure the economy.
This index is based on a combination of factors including growth in output, inflation and real GDP.
“The BoA added that its estimate of inflation in nominal terms was “substantially higher” than the survey.
It said it had therefore “been unable to produce an estimate of the true extent of wage inflation”.
The BoAS also said that its inflation estimates were based on the survey and the BoW index, which does not include the impact that the cost restraint of the recent budget has had on labour market conditions.
The Bureau of Statistic said it could not provide further information about the effect of wage cuts or changes in the cost-of-living allowance (COLA) on employment because the COLA is a cost-saving measure that is included in the price of some goods and a cost of living subsidy.”
It would be inappropriate to make any comment about the economic impact of the proposed changes to the COLAs on employment,” it added.
The ABS said it would publish a full report on wage and salary inflation next month.
Topics:work,government-and-politics,government_and-media,industry,employment,work,economics-and_pricing,wealth-york-institute,welfare,employment-and‑transfer,government,nswFirst posted February 11, 2018 13:36:38Contact Paul FentonMore stories from New South Wales