1301.0 - Year Book Australia, 2007

Contents >> Labour >> Earnings

EARNINGS

Statistics on earnings are used to help evaluate the standard of living of employees and to make policy decisions regarding income redistribution, social welfare, taxation and wage setting.

The ABS concept of earnings is based on the definition adopted by the twelfth International Conference of Labour Statisticians in 1973. Earnings refers to remuneration to employees for time worked or work done, as well as remuneration for time not worked (e.g. paid annual leave).

The ABS produces a range of statistics on earnings paid to employees. The quarterly Survey of Average Weekly Earnings (AWE) and the two-yearly Survey of Employee Earnings and Hours (EEH) provide a statistical measure of the remuneration paid to employees. The EEH survey also provides estimates of earnings for each of the pay-setting methods (i.e. awards, collective agreements and individual arrangements). The Survey of Employee Earnings, Benefits and Trade Union Membership, which is conducted each August as a supplement to the monthly LFS, also provides information about the earnings of employees.

The quarterly Labour Price Index (LPI) measures changes in wages and salaries, and other 'non-wage' components which contribute to the cost to employers of employing labour (i.e. annual leave, superannuation, payroll tax and workers' compensation). Unlike earnings measures determined from the AWE and EEH surveys, the LPI is unaffected by changes in the quality or quantity of work performed, that is, it is unaffected by changes in the composition of the labour force, hours worked, or changes in characteristics of employees (e.g. work performance). The LPI is produced annually on a financial year basis and consists of two components: a wage price index, published quarterly; and a non-wage price index, which is available for each financial year. Information regarding the LPI is available in the Prices chapter.

LEVEL OF EARNINGS

Data on the level of earnings reflect the variations within different population groups, and across industries and occupations. Changes in the level of earnings are also of interest in reflecting the strength of labour demand and supply.

The AWE survey provides an estimate of the gross weekly earnings paid to employees by measuring earnings during a one-week reference period in the middle month of a quarter (excluding irregular payments not related to the reference period). Data are collected from the payrolls of a sample of employers.

The AWE survey provides three types of earnings measures. The first is average weekly ordinary time earnings (commonly referred to as AWOTE) for full-time adult employees, which relates to that part of total earnings attributable to award, standard or agreed hours of work. A second measure is full-time adult total earnings, which includes both ordinary time and overtime pay. A third measure is total earnings for all employees (including full-time and part-time, adult and junior).

Graph 6.46 shows AWOTE from May 1996 to May 2006. Over the ten-year period, AWOTE for full-time adult male employees increased from $716 to $1,101 (or 54%), while for full-time adult female employees increased from $594 to $933 (or 57%).

6.46 AVERAGE WEEKLY ORDINARY TIME EARNINGS(a)

In May 2006 the difference between male and female average weekly earnings was lowest for full-time adult AWOTE (where female earnings were 85% of the male figure of $1,101) and highest for all employees total earnings (where female earnings were 66% of the male figure of $985) (table 6.47). The latter difference reflects the inclusion of part-time employees (a higher proportion of female employees work part time) and the inclusion of overtime pay (of which men earn more than women). In May 2006, 46% of female employees worked part time compared with 15% of male employees.

6.47 AVERAGE WEEKLY EARNINGS - May 2006
	Males	Females	Persons
	$	$	$

Full-time adult ordinary time earnings	1,101.20	932.90	1,041.60
Full-time adult total earnings	1,165.20	948.10	1,088.30
All employees total earnings	985.10	651.00	826.90

Source: Average Weekly Earnings, Australia, May 2006 (6302.0).

Table 6.48 presents AWOTE for full-time adult men and women by states and territories in May 2006. The highest weekly earnings for men and women were in the Australian Capital Territory ($1,201.70); the lowest weekly earnings for men and women were in Tasmania ($943.60).

6.48 AVERAGE WEEKLY EARNINGS(a), By state and territory - May 2006
	Males	Females	Persons
	$	$	$

New South Wales	1,142.20	971.60	1,079.50
Victoria	1,084.90	930.10	1,032.70
Queensland	1,035.10	881.30	979.70
South Australia	1,019.40	916.50	984.30
Western Australia	1,172.70	878.20	1,074.10
Tasmania	989.20	861.10	943.60
Northern Territory	1,114.20	939.80	1,039.00
Australian Capital Territory	1,264.80	1,104.60	1,201.70
Australia	1,101.20	932.90	1,041.60

(a) Full-time adult ordinary time earnings.

Source: Average Weekly Earnings, Australia, May 2006 (6302.0).

In May 2006, the mining industry recorded the highest AWOTE for full-time adults ($1,729 for men and $1,318 for women) (graph 6.49). The industries with the lowest AWOTE for full-time adults were Accommodation, cafes and restaurants ($770 for men and $725 for women) and Retail trade ($834 and $731 respectively).

AWOTE for full-time adult women was less than for men in all industries. Full-time adult AWOTE for females was approximately two-thirds (65%) of male full-time AWOTE in the Finance and insurance industry, rising to 94% in the Accommodation, cafes and restaurants industry.

6.49 AVERAGE WEEKLY ORDINARY TIME EARNINGS(a), By industry(b) - May 2006

Data on average weekly earnings are also available from the EEH survey. This survey provides additional information, such as occupation. AWOTE for full-time adult employees by occupation for May 2004 are shown in graph 6.50. For both men and women, Labourers and related workers earned the lowest average weekly ordinary time earnings of all the occupation groups ($699 for men and $612 for women), whereas the highest earnings were for Managers and administrators ($1,607 for men and $1,391 for women).

Men had higher average earnings than women in each major occupation group. For full-time adult employees, the proportional difference between male and female average weekly ordinary time earnings was smallest for Labourers and related workers (average earnings of women were 88% of those of men) and greatest for Tradespersons and related workers (78%).

6.50 AVERAGE WEEKLY ORDINARY TIME EARNINGS(a), By occupation(b) - May 2004

The Survey of Employee Earnings, Benefits and Trade Union Membership, provides data on average weekly earnings across a range of socio-demographic characteristics.

In August 2005, average weekly earnings of full-time workers was more than double that of part-time workers across all age groups; full-time workers earned, on average, $983 per week in all jobs, compared with $367 for part-time workers. Workers with the lowest average weekly earnings were those aged 15-19 years ($449 for full-time workers and $138 for part-time workers) while those with the highest average weekly earnings were aged 45-54 years ($1,086 for full-time workers and $478 for part-time workers) (graph 6.51).

6.51 AVERAGE WEEKLY EARNINGS(a), By age group - August 2005

This page last updated 16 January 2008

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