What you now have to earn in Australia to be above average

An Australian earning less than $94,000 a year is now considered to be below-average and really needs a big pay rise to cope with the cost of living crisis.

Pay levels are now increasing at the fastest pace in a decade but Australian workers are suffering a record cut in real wages because inflation is vastly outpacing salaries.

The average, weekly, full-time salary in November stood at $1,807.70 or $94,000 a year before overtime and bonuses, the Australian Bureau of Statistics revealed on Thursday.

If pay levels had increased in line with inflation, the typical Australian worker would have earned $98,000, compared with $90,916 back in late 2021.

Even then, that $4,000 difference with the actual average salary of $94,000 would only cover the surging cost of everyday items like grocery bills and petrol – but not soaring mortgage repayments. 

An Australian earning less than $94,000 a year is now considered to be below-average and really needs to get a big pay rise to cope with the cost of living crisis (pictured is a Sydney bartender)

Public sector workers typically earned $102,180 compared with $91,936 for those in the private sector.

An Australian is much more likely to earn a six-figure salary if they work as a public servant, miner or a finance professional, but not a builder. 

Australian wages last year rose by 3.3 per cent, the fastest pace in a decade, but this was well below the inflation rate of 7.8 per cent – the worst since 1990.

That means workers are effectively suffering a record cut in real wages, adjusted for inflation. 

Treasurer Jim Chalmers has disputed Reserve Bank Governor Philip Lowe’s assertion Australia would be facing a wage-price spiral like the late 1970s and early 1980s, with January’s unemployment rate of 3.7 per cent only marginally above December’s 48-year low of 3.5 per cent.

‘Wages growth isn’t the problem when it comes to inflation, it’s part of the solution to cost of living pressures,’ he said.

‘We don’t have an inflation challenge in our economy because wages are too high, but because of a war in Ukraine, pressure on global supply chains, and other challenges in our own economy ignored for too long.’

Treasurer Jim Chalmers has disputed Reserve Bank Governor Philip Lowe’s assertion Australia would be facing a wage-price spiral like the late 1970s and early 1980s, with January’s unemployment rate of 3.7 per cent only marginally above’s December’s 48-year low of 3.5 per cent.

The Commonwealth Bank’s head of Australian economics Gareth Aird said labour market tightness peaked in September 2022, adding wages growth was only likely to slow down in 2023 with more applicants for every job ad.

‘Since then the flow of migrants and foreign workers into the country has accelerated,’ he said.

‘At the same time, job advertisements have fallen and the number of applicants per job ad has risen. This dampens wages growth.’

Full-time workers with bonuses saw their average pay levels rise by 3.6 per cent to $97,583 a year, or $1,876.80 a week. 

Mr Aird said bosses had offered short-term bonuses to attract and retain staff that could be easily taken away as interest rate rises slowed the economy.

‘Firms that have used bonuses and other one off payments to reward, retain and attract workers rather than upwardly adjusting base pay have not had a permanent upward adjustment in input costs,’ he said.

‘As demand in the economy slows these payments can be wound back.’

An Australian is much more likely to earn a six-figure salary if they work as a public servant, miner or a finance professional, but not a builder (pictured is a construction worker in Sydney)

The mining industry had the highest average salary of $146,208, followed by information technology, media and telecommunications ($118,076); finance and insurance ($114,478); professional, scientific and technical services ($111,301); and electricity, gas, water and waste services ($109,106).

The public administration and safety category, covering public servants and police officers, had an average salary of $101,244. 

Despite a shortage of builders and housing, the construction sector had a below-average salary of $92,872 with interest rate rises expected to squeeze demand for new homes. 

Retail workers doing full-time hours now earn $70,398 a year, following a 5.2 per cent increase in the minimum wage on July 1 that at the time was slightly above inflation.

Hospitality workers earn $67,278 a year, in a sector known as food and accommodation, with their minimum wage rises delayed until October 1.