Wage rates still rising despite falling jobs

Wage rates still rising despite falling jobs

Most workers do not appear to be subject to wage freezes according to today’s Labour Cost Index (LCI) which shows hourly wage rates are still rising despite the recession and falling job numbers, says the CTU’s Economist and Policy Director Bill Rosenberg.

Average total hourly earnings (including overtime) in the private sector increased 4.2 percent for the year to September 2009 and 5.8 percent in the public sector, or 4.9 percent for all employees.

Average ordinary time hourly earnings increased 4.4 percent in the private sector and 5.9 percent in the public sector or 5.1 percent for all workers. Average ordinary time earnings are now $25.42 per hour ($32.07 in the public sector and $23.55 in the private sector).

These occurred in a context of the number of full-time equivalent employees decreasing 3.5 percent for the year to September 2009, and the number of filled jobs falling 2.6 percent. Seasonally adjusted total paid hours decreased by 3.0 percent. Part-time employment increased 0.2 percent in the quarter though it decreased 1.5 percent in the year.

However there is the hint of the end of the fall in hours worked with seasonally adjusted total paid hours increasing 0.2 percent in the September 2009 quarter, compared to their decrease of 3.0 percent in the September 2009 year. Similarly, seasonally adjusted average total weekly paid hours for FTEs increased 0.6 percent for the September 2009 quarter, to reach 37.7 hours, compared with 37.48 hours in the June 2009 quarter. Overtime worked is still falling.

While the LCI showed an annual increase of only 2.1 percent in the year to the September 2009 quarter for salary and ordinary time wages (the lowest recorded in the series since December 2002) this is nevertheless still higher than the rate of inflation (1.7 percent). It is down from a 2.9 percent increase in the year to the June 2009 quarter and 3.4 percent to March. The LCI corrects for changes in composition in industries, which may have been affected significantly by the fallout of the recession.

The median increase in ordinary time rates from the previous year for those who received an increase was 4.0 percent, compared to 4.0 percent in the year to June and 4.2 percent in the year to March.

ENDS

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