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1301.0 - Year Book Australia, 2005  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 21/01/2005   
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Contents >> Labour >> Earnings and benefits

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.

The ABS concept of earnings is based on the definition adopted by the twelfth International Conference of Labour Statisticians in 1973. Earnings are considered to be remuneration to employees for time worked or work done, as well as remuneration for time not worked (e.g. paid annual leave). Many employees also receive other benefits in addition to earnings, including long-service leave and superannuation.

The ABS produces a range of statistics on earnings paid to workers. The quarterly Survey of Average Weekly Earnings (AWE) and the biennial Survey of Employee Earnings and Hours (EEH) both provide a statistical measure of the cash remuneration paid to employees. The EEH survey also provides estimates of earnings for each of the pay setting methods (i.e. awards, individual agreements and collective agreements). The Survey of Employee Earnings, Benefits and Trade Union Membership, which is run annually as a Labour Force Supplementary Survey, provides information about the earnings of employees, as well as the number and type of employee benefits received by workers. It does not, however, quantify the value of these benefits.

The quarterly Wage Cost Index (WCI) measures the quarterly changes to wages and salaries of a representative mix of employee jobs. Unlike the AWE and EEH surveys, the WCI is unaffected by changes in the quantity or quality of work performed. The ABS is currently developing a labour price index, which will also reflect changes in the price of 'non-wage' components (e.g. superannuation and workers' compensation) which contribute to the cost to employers of employing labour.

Level of earnings

Data on the level of earnings reflect the variations within different population groups, and across industries and occupations, providing a more detailed picture of their comparative experiences. Differences in 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 earnings not related to the reference period). Data are collected from the payrolls of a sample of employers.

The AWE survey collects three types of earnings data. Average weekly ordinary time earnings for full-time adult employee jobs (commonly referred to as AWOTE) relate 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 6.45 shows AWOTE from February 1994 to February 2004. Over the 10-year period AWOTE for male employees increased by 54%, from $648.70 to $1,000.70, while AWOTE for female employees increased by 56%, from $546.70 to $851.00.

Graph 6.45: AVERAGE WEEKLY ORDINARY TIME EARNINGS(a)



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.


6.46 AVERAGE WEEKLY EARNINGS - February 2004

Males
Females
Persons
$
$
$

Full-time adult ordinary time earnings
1,000.70
851.00
947.80
Full-time adult total earnings
1,064.00
865.60
993.90
All employees total earnings
900.10
591.70
754.30

Source: Average Weekly Earnings, Australia, February 2004 (6302.0).


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.


6.47 AVERAGE WEEKLY EARNINGS, By state and territory - February 2004

Full-time adult ordinary time earnings

Males
Females
Persons
$
$
$

New South Wales
1,044.60
897.20
991.40
Victoria
1,014.60
844.30
956.10
Queensland
927.30
807.50
884.60
South Australia
897.00
812.60
868.10
Western Australia
1,022.40
797.60
946.30
Tasmania
871.60
757.20
835.70
Northern Territory
981.40
865.00
932.60
Australian Capital Territory
1,151.90
960.70
1,067.80
Australia
1,000.70
851.00
947.80

Source: Average Weekly Earnings, Australia, February 2004 (6302.0).


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.

Graph 6.48: AVERAGE WEEKLY ORDINARY TIME EARNINGS(a), By industry(b) - February 2004



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%).

Graph 6.49: AVERAGE WEEEKLY TOTAL EARNINGS(a), By occupation(b) - May 2002



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.


6.50 METHODS OF SETTING PAY, By sector - May 2002

Award only
Collective agreement(a)
Individual agreement(a)
Total
%
%
%
%

Males
Private sector
17.7
25.8
56.6
100.0
Public sector
4.0
88.5
7.6
100.0
All sectors
15.1
37.3
47.5
100.0
Females
Private sector
32.2
24.1
43.7
100.0
Public sector
5.1
90.9
4.0
100.0
All sectors
26.1
39.2
34.7
100.0
Persons
Private sector
24.6
25.0
50.5
100.0
Public sector
4.6
89.8
5.6
100.0
All sectors
20.5
38.2
41.3
100.0

(a) Includes registered and unregistered agreements.

Source: Employee Earnings and Hours, Australia, May 2002 (6306.0).


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%).


6.51 TOTAL HOURLY RATES OF PAY EXCLUDING BONUSES, By sector

Index numbers(a)

March qtr 2003
June qtr 2003
September qtr 2003
December qtr 2003
March qtr 2004
Percentage change from March qtr 2003 to March qtr 2004

PRIVATE

New South Wales
119.7
120.2
121.6
122.7
123.5
3.2
Victoria
119.0
119.7
121.2
122.1
122.7
3.1
Queensland
117.5
118.2
119.2
120.8
121.8
3.7
South Australia
118.4
119.1
121.0
122.2
123.1
4.0
Western Australia
119.2
119.9
121.4
122.3
123.1
3.3
Tasmania
115.9
116.7
118.2
119.4
120.0
3.5
Northern Territory
116.1
116.4
117.6
118.1
119.5
2.9
Australian Capital Territory
118.9
119.2
121.1
122.5
122.9
3.4
Australia
118.9
119.5
120.9
122.0
122.8
3.3

PUBLIC

New South Wales
123.7
124.2
127.1
127.8
130.0
5.1
Victoria
120.0
121.4
122.5
123.3
124.1
3.4
Queensland
120.8
121.1
122.9
124.2
126.0
4.3
South Australia
120.8
121.2
123.3
125.2
125.9
4.2
Western Australia
119.1
119.5
121.1
121.9
122.5
2.9
Tasmania
117.8
118.7
120.7
121.3
121.7
3.3
Northern Territory
119.4
119.6
120.8
123.0
123.6
3.5
Australian Capital Territory
117.6
117.9
120.7
122.1
123.3
4.8
Australia
121.1
121.8
123.8
124.8
126.3
4.3

ALL SECTORS

New South Wales
120.6
121.1
122.8
123.8
124.9
3.6
Victoria
119.2
120.0
121.5
122.3
123.0
3.2
Queensland
118.4
119.0
120.2
121.7
122.9
3.8
South Australia
119.1
119.7
121.6
123.0
123.9
4.0
Western Australia
119.2
119.8
121.3
122.2
122.9
3.1
Tasmania
116.6
117.4
119.0
120.0
120.6
3.4
Northern Territory
117.4
117.6
118.8
120.1
121.1
3.2
Australian Capital Territory
118.1
118.4
120.8
122.2
123.1
4.2
Australia
119.4
120.1
121.6
122.7
123.7
3.6

(a) Base of each index: September quarter 1997 = 100.0.

Source: Wage Cost Index, Australia (6345.0).


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.

Graph 6.52: TOTAL HOURLY RATES OF PAY EXCLUDING BONUSES, By occupation(a)



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.

Graph 6.53: TOTAL HOURLY RATES OF PAY EXCLUDING BONUSES, By Industry(a)



Non-wage benefits

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.

Leave 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.

Graph 6.54: EMPLOYEES IN MAIN JOB, By type of standard leave benefit received



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.


6.55 EMPLOYEES IN MAIN JOB, Leave entitlements - August 2003

Occupation(a)
Units
Sick leave and/or holiday leave(b)
Long-service leave

MALES

Managers and administrators
%
85.7
72.6
Professionals
%
83.7
74.0
Associate professionals
%
81.6
69.3
Tradespersons and related workers
%
81.7
70.5
Advanced clerical and service workers
%
83.7
75.3
Intermediate clerical, sales and service workers
%
79.3
71.7
Intermediate production and transport workers
%
72.9
63.6
Elementary clerical, sales and service workers
%
49.9
42.6
Labourers and related workers
%
56.1
45.1
All occupations
%
76.0
65.7
Total number of employees
'000
3,311.2
2,861.1

FEMALES

Managers and administrators
%
85.1
75.6
Professionals
%
83.6
78.8
Associate professionals
%
81.4
71.1
Tradespersons and related workers
%
65.8
43.6
Advanced clerical and service workers
%
72.3
61.0
Intermediate clerical, sales and service workers
%
69.5
61.2
Intermediate production and transport workers
%
64.7
58.2
Elementary clerical, sales and service workers
%
41.0
36.0
Labourers and related workers
%
47.1
38.6
All occupations
%
68.1
60.3
Total number of employees
'000
2,553.4
2,262.4

PERSONS

Managers and administrators
%
85.6
73.3
Professionals
%
83.6
76.5
Associate professionals
%
81.5
70.0
Tradespersons and related workers
%
80.3
68.1
Advanced clerical and service workers
%
73.6
62.7
Intermediate clerical, sales and service workers
%
72.1
64.0
Intermediate production and transport workers
%
71.8
62.9
Elementary clerical, sales and service workers
%
44.1
38.2
Labourers and related workers
%
52.7
42.6
All occupations
%
72.4
63.2
Total number of employees
'000
5,864.6
5,123.5

(a) Classified according to the Australian Standard Classification of Occupations.
(b) Of those persons entitled to paid holiday and/or paid sick leave, 97% were entitled to both types of leave.

Source: Employee Earnings, Benefits and Trade Union Membership, Australia, August 2003 (6310.0).


Superannuation

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 6.56: EMPLOYEES IN MAIN JOB, Entitled to superannuation



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.

Graph 6.57: EMPLOYEES ENTITLED TO SUPERANNUATION IN MAIN JOB, By weekly earnings - August 2003



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).

Graph 6.58: EMPLOYEES ENTITLED TO SUPERANNUATION IN MAIN JOB, By industry(a)



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