Wages change and growth guide
Learn about our wages change (or growth) measures and how to use them
Wages change (or growth) over time can be measured in a few different ways:
- wage inflation - changes in the price of wages and salaries unaffected by compositional factors
- change in the earning levels of employees
- change in total wages paid in the economy.
We have earnings estimates available to measure wages change in each of these ways. The right data source for you will depend on the purpose of your analysis.
The Earnings guide includes information about other earnings measures.
The quarterly Wage Price Index (WPI) measures change in the price of wages and salaries (similar to earnings) in the Australian labour market over time. In a similar way to the Consumer Price Index (CPI), it follows changes in the hourly rate paid to a fixed group (or “basket”) of jobs.
The WPI measures pure price change by removing the effect of compositional factors including the quality or quantity of work performed or the composition of the workforce. This separates it from other ABS earnings measures.
WPI movements do not reflect changes in:
- tasks or responsibilities
- hours worked
- job holder (for example junior rate, completion of trade certificate)
- location where work is performed.
Use the WPI if your focus is wage inflation or inflationary pressures associated with wages and salaries. Estimates are available by industry, state/territory and public/private sector.
Change in earnings levels
Average Weekly Earnings (AWE) measures average gross (pre-tax) weekly earnings paid to employees and is collected every six months. Movements in average weekly earnings levels provide an alternative view of wages growth to the WPI by reflecting real-world changes in both the level of earnings per employee and in the composition of employment.
This can include changes in the:
- proportion of full-time, part-time, casual and junior employees
- distribution of occupations within and across industries
- distribution of employment between industries.
The Average Weekly Earnings, Australia methodology page includes information you will need to draw the correct conclusions about wages growth from this data.
Use AWE if your focus is on understanding changes in the level of average earnings over time, which reflects the influence of real-world changes in the composition of the labour market.
Change in total wages paid
The total wages index measures changes in the volume of wages and salaries paid each week. It is part of the Weekly Payroll Jobs and Wages in Australia estimates, which are released monthly. These estimates allow us to see week-to-week changes in the labour market for the first time.
Total wages index movements are more affected by compositional changes than other earnings measures, as they reflect changes in aggregate wages and salaries paid rather than average earnings per job or employee. Changes in the number of jobs being worked affect the total wages index. It is also affected by:
- changes in hours worked
- cyclical payments including bonuses, commissions or lump sum payment of leave loading
- payment of penalty rates for public holidays
- irregular payments including overtime, ad hoc or one off payments.
Use the total wages index if your focus is short term changes and understanding the effects on total (rather than job or employee) earnings.