1360.0 - Measuring Australia's Economy, 2003  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 03/02/2003   
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Contents >> Section 6. Prices and Income >> Wage Cost Index

The Wage Cost Index (WCI) was compiled for the first time for the December quarter 1997 (with a base of September quarter 1997 = 100.0). For the June quarter 2002, the total hourly rates of pay excluding bonuses index for Australia was 115.9, reflecting quarterly growth from March quarter 2002 of 0.6% and annual growth of 3.1%.




TOTAL HOURLY RATES OF PAY EXCLUDING BONUSES
New South Wales
Victoria
Queensland
South
Australia
Western
Australia
Tasmania
Northern
Territory
Australian
Capital
Territory
Australia
INDEX NUMBERS
1999
September
107.0
106.1
106.3
105.9
106.1
105.5
105.8
105.6
106.4
December
107.5
106.8
107.1
106.8
106.7
106.0
106.7
106.0
107.0
2000
March
108.2
107.6
107.6
107.4
107.5
106.5
107.2
106.6
107.7
June
109.0
108.3
108.0
108.1
108.0
106.9
107.5
107.0
108.4
September
110.7
109.4
109.0
109.1
109.3
108.1
108.6
108.9
109.7
December
111.3
110.4
110.3
110.1
110.0
108.9
109.9
109.8
110.6
2001
March
112.5
111.2
111.2
111.1
111.8
109.5
110.3
110.6
111.7
June
113.1
112.2
111.9
111.6
112.5
110.3
110.5
111.0
112.4
September
114.5
113.6
113.0
112.6
113.2
111.5
111.6
112.6
113.6
December
115.2
114.2
113.9
113.9
114.0
112.1
113.3
113.3
114.4
2002
March
116.1
115.0
114.6
114.8
114.9
113.1
113.9
113.8
115.2
June
116.6
116.0
115.2
115.2
115.7
113.7
114.1
114.3
115.9
Source: Wage Cost Index, Australia (6345.0)


Explanatory Notes

The WCI measures labour market related changes in the wage and salary component of the price of labour. The WCI can change as a result of minimum wage case outcomes, enterprise bargaining and individual agreements between employers and employees, other formal and informal pay setting outcomes and other labour market related forces, for example skill shortages. It is not affected by:
l changes in the nature of work performed (for example, different tasks or responsibilities);
l changes in the quantity of work performed (for example, increases in hours worked);
l changes in the characteristics of the job occupant (for example, age, apprenticeship year, successful completion of training or qualifications, grade or level, experience, etc);
l changes resulting from the individual performance of a job occupant.

The WCI measures changes over time in wage and salary rates of pay for employee jobs, unaffected by changes in the quality or quantity of work performed. It is a measure of movements in the price of labour services, and so differs from the average weekly earnings measure. Estimates of average weekly earnings are derived simply by dividing estimates of employees' total weekly earnings by estimates of the number of employees. Changes in the average may be affected not only by changes in the in level of earnings of employees but also by changes in the composition of the wage and salary earners segment of the labour force.
    Four sets of indexes are produced - ordinary time hourly rates of pay, including and excluding bonuses, and total hourly rates of pay, including and excluding bonuses. Individual indexes are compiled for various combinations of State/Territory, sector, broad industry group and broad occupation group.

    Governments, unions, employer groups, researchers and private bodies use the WCI as a guide to changes in wage and salary rates. It is used for adjusting business contracts as well as for economic analysis.


    Further Reading

    Wage Cost Index, Australia (6345.0)
    Contains quarterly indexes measuring changes in wage and salary costs for employee jobs, classified by State and Territory, sector (private/public), industry and occupation.

    Information Paper: Wage Cost Index, Australia (6346.0)
    Provides more information on the methodology and construction of the WCI.



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