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Statistics on earnings are of interest to help evaluate the standard of living of employees and to make policy decisions regarding income redistribution, social welfare, taxation and wage fixation. Comprehensive earnings statistics are required by all levels of government, social and labour market analysts, industrial tribunals, trade unions, employer associations, academics and international agencies. Information about the benefits received by workers provides a broader picture of working conditions and of rewards provided for work done.
Table 6.46 shows in February 2004 the difference between male and female average weekly earnings was least for AWOTE (females earned 85% of the male figure of $1,000.70) and greatest for all employees total earnings (females earned 66% of the male figure of $900.10). 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 males earn more than females). In February 2004, 45% of female employees worked part-time compared with 14% of male employees.
Table 6.47 presents the male and female AWOTE for full-time adults by state and territory in February 2004. The highest weekly earnings for both males and females were in the Australian Capital Territory. The lowest weekly earnings for males and females were in Tasmania.
Graph 6.48 shows in February 2004 the mining industry recorded the highest AWOTE for full-time adults of $1,510.40 for males and $1,088.10 for females. The industries with the lowest average for males and females were accommodation, cafes and restaurants ($701.40 for males and $662.90 for females) and retail trade ($739.60 and $662.00).
AWOTE for full-time adult females was less than for males in all industries. Full-time adult females earned approximately two-thirds (63%) of male full-time adult ordinary time earnings in the finance and insurance industry, rising to 95% in the accommodation, cafes and restaurants industry.
Data on average weekly earnings are also available from the biennial Survey of Employee Earnings and Hours (EEH). This survey provides additional classifications of the data, such as category of employee, type of earnings and occupation. Average weekly total earnings for full-time adult employees by occupation for May 2002 are presented in graph 6.49. For both males and females, elementary clerical, sales and service workers earned the lowest average weekly earnings of all the occupation groups ($693.20 for males and $578.40 for females), whereas the highest earnings were for managers and administrators ($1,525.50 for males and $1,240.00 for females).
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 total earnings was smallest for professionals (average earnings of females were 86% of those of males) and greatest for intermediate production and transport workers (72%).
How pay is set
Information on the methods of setting the main part of employees' pay is collected in the biennial EEH survey. Three different methods of setting pay are identified in EEH: awards; collective agreements; and individual agreements. Data are also collected on whether agreements (individual and collective) are certified, approved or registered with an industrial tribunal or authority.
Awards are legally enforceable determinations made by federal or state industrial tribunals that set the terms of employment, including pay. In the EEH survey, employees whose pay is set by 'award only' are those who have the main part of their pay set by an award and who are not paid more than the award rate of pay.
Collective agreements, which include enterprise and workplace agreements, are arrangements between one or more employers and a group of employees (or associations representing employees) that set the terms of employment, including pay, for a group of employees.
Individual agreements set the terms of employment, including pay, for an individual employee, and are agreed to by the individual. The agreement may be verbal or written. Employees whose pay is set by individual agreements include those who have registered individual agreements, those whose pay is set by an individual common law contract, employees receiving pay at more than the award rate by individual agreement, and working proprietors of incorporated enterprises who set their own rate of pay.
Table 6.50 shows in May 2002 the most common method of setting pay was individual agreements (41%), followed by collective agreements (38%) and awards only (20%). Half of all private sector employees had their pay set by individual agreements (50%). In contrast, only 6% of public sector employees had their pay set by individual agreements, with the majority covered by collective agreements (90%). Males were more likely than females to have their pay set by an individual agreement (48% compared with 35%), and less likely than females to have their pay set by an award only (15% compared with 26%). Part of the difference between male and female employees' pay setting methods can be attributed to their different occupation and industry mix.
Changes in the price of labour
Changes in the price of labour are derived from quality adjusted average hourly rates of pay (excluding bonuses) of a representative sample of employee jobs. These data are compiled to form the quarterly wage cost index (WCI). The WCI is a 'pure' price index which measures changes over time in wage and salary costs in the Australian labour market. The WCI is unaffected by changes in the quality and quantity of work performed.
As shown in table 6.51, increases in the indexes for total hourly rates of pay excluding bonuses varied across sectors, and across states and territories. For Australia, the growth through the year to March quarter 2004 was the same as for the year through to the March quarter 2003 (3.6%). In the year through to March quarter 2004 (i.e. from the March quarter 2003 to the March quarter 2004), public sector wages grew by 4.3% and private sector wages grew by 3.3%. Since the March quarter 2001, the percentage growth (from the corresponding quarter of the previous year) of public sector wages has been higher than or equal to the growth in private sector wages with the exception of the September quarter 2002.
For the states and territories, the highest increase through the year to the March quarter 2004 was recorded by the Australian Capital Territory (4.2%) and the lowest by Western Australia (3.1%). The Northern Territory recorded the smallest increase through the year to the March quarter 2004 in the private sector (2.9%), and South Australia the highest (4.0%). For the same period, in the public sector Western Australia recorded the lowest increase (2.9%) and New South Wales the largest (5.1%).
Graph 6.52 compares the rate of increase in wages across all major occupation groups for the year through to March quarter 2004 and the year through to the March quarter 2003. In both periods, wages growth for professionals (3.9% to March quarter 2004 and 4.2% to March quarter 2003) was greater than that for other major occupation groups. Managers and administrators, and labourers and related workers recorded the lowest annual growth rate of 3.2% for the year through to March quarter 2004.
Annual growth by industry is shown in graph 6.53. For the year through to the March quarter 2004, the increases in wages ranged from 2.5% for the accommodation, cafes and restaurants industry to 4.5% for electricity, gas and water supply, and government administration and defence industries. Communication services showed the greatest change with a 4.3% increase for the year through to March quarter 2004 compared with the 1.5% increase for the year through to the March quarter 2003. The annual growth rate of the WCI was lower the year through to March quarter 2004 than for the previous year for the majority of industries, the exceptions being electricity, gas and water supply, communication services, property and business services, government administration and defence, and health and community services industries, with the rate remaining the same for the retail trade industry.
Types of non-wage benefits received by employees include leave benefits (such as holiday leave, sick leave, long-service leave, maternity/paternity leave), and superannuation. Data on these employment benefits are collected in the ABS Survey of Employee Earnings, Benefits and Trade Union Membership, covering the nature and type (but not value) of benefits.
As shown in graph 6.54, the proportion of employees entitled to paid holiday leave or sick leave declined over the period 1993-2003 (from 78% of all employees in 1993 to 72% in 2003), with most of the decline occurring between 1993 and 1996. Entitlement to long-service leave fell between 1993 and 1999 (from 66% to 61% of all employees), but has since increased to 63% in 2003.
Table 6.55 shows the proportion of employees entitled to standard leave benefits by occupation. In August 2003 about three-quarters (76%) of male employees were entitled to paid holiday and/or sick leave. More than 80% of males were entitled to holiday and/or sick leave in five occupation groups: managers and administrators, professionals, associate professionals, tradespersons and related workers, and advanced clerical and service workers.
Just over two-thirds (68%) of females were entitled to paid holiday and/or sick leave. For females there were three occupation groups with more than 80% of employees entitled to these leave benefits: managers and administrators, professionals, and associate professionals.
Under the Superannuation Guarantee Act (Cwlth) introduced in 1992, employers are obliged to make superannuation contributions on behalf of most employees. This has resulted in an increase in superannuation coverage provided by employers. As shown in graph 6.56, superannuation coverage increased from 80% of all employees in August 1992 to 90% in August 2003. There are some exempt employees: for example, employers are not obliged to contribute to superannuation for employees aged less than 18 years who are working not more than 30 hours a week, or for employees on low earnings.
Graph 6.57 shows the proportion of employees entitled to superannuation by earnings group in August 2003. Overall, the proportion of male and female employees entitled to superannuation was similar (males 91%, females 90%). In the lower earnings groups, females have higher superannuation coverage than males. In August 2003, 58% of female employees earning less than $200 a week were entitled to superannuation, compared with 43% of male employees.
Between August 1998 and August 2003 superannuation coverage provided by employers increased for most industries. The largest increase over this period was in the retail trade industry, rising from 76% of all employees in August 1998 to 79% in August 2003.
In August 2003 superannuation coverage was highest in government administration and defence industry (99%). The accommodation, cafes and restaurants, and retail trade industries had the lowest superannuation coverage (78% and 79% respectively); the two industries also have the lowest average earnings (graph 6.58 and graph 6.48).