This article has just popped up about the largest annual wage increase for quite some time. With wages rising and houses flattening and falling, maybe there wont be a 20% bust but rather wage inflation will narrow the gap fast and sufficiently enough to avoid a general house price fall, say 20%.
Would wage inflation of 5-7% over the next 3 or 5 years together with flat 0% house price growth bring us back to traditional levels of average house price relevant to average wage levels?
Geez, I hope that makes sense…anyway here’s the article.
Average earnings top $1000
From: AAP
August 18, 2005Average adult ordinary time weekly earnings rose 1.6 per cent in the three months to May and were up 6.0 per cent for the full year, figures released today show.
The Australian Bureau of Statistics said full time adult ordinary time earnings reached $1,008.30 a week in the May quarter.
Full time adult total earnings were also up, risng 1.3 per cent in May to $1,059.70. Over the full year they rose 6.5 per cent.In the private sector, full time adult ordinary time earnings rose 1.6 per cent in May to $982.70, to be up 6.6 per cent for the full year.
On the full time adult total earnings measure, private sector wages rose 1.3 per cent in May, and 7.3 per cent over the year, to $1,040 a week.
Wages growth was much more subdued in the public sector, with full time adult ordinary time earnings up 1.2 per cent in May, and 4.1 per cent over the year, to $1,092.10 a week.
Public sector full time adult total earnings were up at $1,126.50 a week.
The increase was driven by a huge spike in wages in the construction, cultural and personal services sectors.Adult ordinary time weekly wages were up 9.2 per cent in construction for the full year, to $996.80 a week, while on the adult full time measure they were up 11.8 per cent.
In the cultural services sector, adult ordinary time weekly wages were up 10.1 per cent to $1,063.20 a week, while for personal services wages rose 8.2 per cent to $973.70.
Other large rises were recorded in transport (up 7.3 per cent), property and business services (up 7.5 per cent) and education (up 5.6 per cent).
…Well, yes. The problem is that the current situation of wage inflation growing faster than GDP is not sustainable for long – at least not with falling or static unemployment levels.
Out of interest, has anybody here had a 6.5% wage rise this year? Mine is only up around 5%…[jealous]
F.[cowboy2]
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