Data released today revealed wages were sluggish in the March quarter before restrictions hit the economy.
The Australian Bureau of Statistics (ABS) today released its wage data for the March quarter, and revealed the seasonally-adjusted Wage Price Index (WPI) rose 0.5%.
Public sector wages grew at a slightly faster rate compared to the private sector - 0.5% compared to 0.4%.
However, inflation for the same quarter rose 0.3%, and 2.2% for the year.
Annually, this means a wage drop of 0.1% in real terms (2.1% wage growth on the year).
Similarly, December quarter data last year revealed wages dropped in real terms by 0.2%.
ABS chief economist Bruce Hockman said wage growth has been 'steady' over the past four quarters.
"Today's data relates to the period shortly before restrictions were put in place to contain the spread of the coronavirus (COVID-19), capturing wage information for the mid-month (February) of the March quarter," he said.
Last week the ABS also revealed wages had fallen 8.2% in a month's time frame from 14 March to 18 April.
Coronavirus restrictions began 22 March, with a third of jobs lost in the accommodation and food services sector in that timeframe.
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Westpac senior economist Justin Smirk said it will be some time until there's a material effect on wages from COVID-19.
"Wages growth was slowing even before COVID-19 hit," he said.
"The state data has been important for understanding national wage dynamics.
"Victoria was the state that has had the fastest rate of wage inflation on the back of a falling underutililisation rate through 2018 and into 2019.
"NSW wages never picked up even with a national low in underutilisation."
Australia's most populated states had wage rises of just 0.4% in the quarter.
Queensland, in comparison, was 0.6%.
However, on the year Victoria was the strongest performer at 2.5%.
By sector, education and training recorded the highest quarterly rise of 0.9%
Construction, retail trade, accommodation and food services, and administrative and support services all had soft wage growth at just 0.2% in the quarter.
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