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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 6.42 shows that, in February 2003, the difference between male and female average weekly earnings was least for AWOTE (females earned 84% of the male figure of $954.10) and greatest for all employees total earnings (females earned 65% of the male figure of $862.60). The latter difference reflects the inclusion of part-time employees, as a higher proportion of female employees work part-time. In February 2003, 45% of female employees worked part-time compared to 14% of male employees.
Table 6.43 presents the male and female AWOTE for full-time adults by state and territory in February 2003. The highest weekly earnings for both males and females was in the Australian Capital Territory. The lowest weekly earnings for males was in Queensland and the lowest for females was in Tasmania.
Graph 6.44 shows that, in February 2003, the Mining industry recorded the highest AWOTE for full-time adults of $1,443.90 for males and $1,054.30 for females. The industries with the lowest average were Accommodation, cafes and restaurants ($674.30) and Retail trade ($683.70).
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 92% in the Retail trade industry.
Data on average weekly earnings are also available from the biennial EEH survey. 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 6.45. For both males and females, Elementary clerical, sales and service workers earned the lowest average weekly earnings of all the occupations ($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 occupation. 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 an 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 6.46 shows that, 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 to 35%), and less likely than females to have their pay set by an award only (15% compared to 26%). Part of the difference between male and female employees can be attributed to their different occupation and industry mix.
The methods of setting pay varied considerably across occupation groups. Employees in higher skilled occupation groups were more likely to have their pay set by an individual or collective agreement, while employees in lower skilled occupation groups were more likely to have their pay set by an award only (table 6.47). For example, 79% of Managers and administrators had their pay set by an individual agreement while less than 1% had their pay set by award only. In contrast, 23% of Elementary clerical, sales and service workers had their pay set by an individual agreement, while 41% had their pay set by an award only.
The methods of setting pay also varied considerably across industry groups. Table 6.48 shows that, in May 2002, Wholesale trade had the highest proportion of employees whose pay was set by individual agreements (80%), and Government administration and defence had the highest proportion of employees whose pay was set by collective agreements (87%). The Accommodation, cafes and restaurants industry had the highest proportion of employees whose pay was set by award only (61%).
Table 6.49 shows the average weekly total earnings of employees under the different methods of setting pay. In May 2002, employees whose pay was set by individual agreements earned an average of $781.70 a week, compared to $755.40 for employees whose pay was set by collective agreements. The average weekly total earnings of employees whose pay was set by an award only was considerably lower ($419.90). However, such broad level comparisons can be strongly affected by the association between certain employee characteristics (such as occupation, full-time/part-time status, sex and industry of employment) and the methods used to set pay.
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 WCI, which is published by the ABS each quarter. 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 6.50, increases in the indexes for total hourly rates of pay excluding bonuses varied across sectors and across states and territories. In the 12 months to March 2003, public sector wages grew at 4.0% and private sector wages grew at 3.5%. Since the March quarter 2000, 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 annual percentage increase in wages from the March quarter 2002 to the March quarter 2003 was recorded by New South Wales (3.9%) and the lowest was recorded by Tasmania and the Northern Territory (both 3.1%). The Northern Territory recorded the smallest annual growth in the private sector WCI (3.0%), and South Australia the highest (3.8%). In the public sector Tasmania recorded the smallest annual growth (2.9%) and New South Wales the largest (4.9%).
For Australia, the annual wages growth to March 2003 was greater than the annual growth to March 2002 (3.6% compared to 3.1%). As shown in graph 6.51, the rate of increase in wages across all major occupation groups was greater for the year ending March 2003 than for the year ending March 2002. In both periods, annual wages growth for Professionals (3.5% to March 2002 and 4.2% to March 2003) was greater than that for other major occupation groups. Intermediate production and transport workers recorded the lowest annual growth rate of 3.2% for the year ending March 2003.
Annual growth by industry is shown in graph 6.52. For the 12 months to March 2003, the increases in wages ranged from 1.5% for Communication services to 5.1% for Education. The 5.1% increase for Education is the largest annual movement recorded for this industry since the series commenced in September 1997. The annual growth rate of the WCI was higher to March 2003 than for the previous year for all industries other than Mining, Electricity, gas and water supply, Communication services, Finance and insurance, and Personal and other services, with the rate remaining the same for Property and business services.
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 6.53, the proportion of employees entitled to paid holiday leave or sick leave declined over the period 1992-2002 (from 78% of all employees in 1992 to 71% in 2002), with most of the decline occurring between 1992 and 1996. Entitlement to long-service leave fell between 1992 and 1999 (from 66.5% to 61.1% of all employees), but has since increased to 63.3% in 2002.
Table 6.54 shows the proportion of employees entitled to standard leave benefits by occupation. In August 2002, about three-quarters 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 6.55, superannuation coverage increased from 80.3% of all employees in August 1992 to 89.9% in August 2002. 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 6.56 shows the proportion of employees entitled to superannuation by earnings group, in August 2002. Overall, the proportion of male and female employees entitled to superannuation was similar (males 90.6%, females 89.1%). In the lower earnings groups, females have higher superannuation coverage than males. In August 2002, 54.6% of female employees earning less than $200 a week were entitled to superannuation, compared with 43.5% of male employees.
Between August 1997 and August 2002, superannuation coverage provided by employers increased across most industries. The largest increase over this period was in Accommodation, cafes and restaurants, rising from 75.9% of all employees in August 1997 to 81.6% in August 2002.
In August 2002, superannuation coverage was highest in Government administration and defence (97.7%). Retail trade and Accommodation, cafes and restaurants had the lowest coverage (77.9% and 81.6% respectively). Retail trade and Accommodation, cafes and restaurants also have the lowest average earnings (graph 6.57 and graph 6.44).