Jim Chalmers claims that average full-time workers are earning $3,700 more per year under the Labor Party. Is this true?
The Albanese government came to power promising to increase wages again.
Promise Check: Real Wages In the 2022 election, Labor promised to achieve wage growth. Here's how this promise is being tracked.
A wallet with a protruding pink five-dollar note, a blue ten-dollar note, and a red twenty-dollar note. Read more After a year in power, Treasurer Jim Chalmers told parliament on September 11 that the Labor Party had achieved just that.
"The Labor Party said that we would increase wages again, and we have," he said.
"In the first year of the Albanese government, the average full-time worker is $3,700 better off."
Is this true? RMIT ABC Fact Check investigates.
Verdict: Mr. Chalmers' statement is misleading.
According to data from the Australian Bureau of Statistics (ABS), the total average weekly earnings of full-time employees increased by 3.9 percent, or $3,738.80, in the first year of Labor's tenure.
However, experts noted that this figure ignores the impact of inflation, which outpaced income growth by 6 percentage points over the year to June 30, according to the Consumer Price Index (CPI).
In real terms, total average weekly earnings for full-time employment fell by 2 percent over the year to May 2023.
Instead of workers becoming "better off," the average full-time wage actually fell by $2,012.92 in real terms in the first year of Labor's tenure.
Experts also stated that average earnings can be adjusted for the selected Living Cost Index (SCLI) bureaus, which are designed to more accurately measure inflation and include costs associated with mortgage interest payments.
On this basis, inflation among wage-earning households increased to 9.7 percent, resulting in a loss of purchasing power of $5,470.40 per year.
Similar results were found when looking at ordinary time earnings, excluding overtime.
A hand holds money, banknotes and coins with coffee and fruit in the background, the cost of living The cost of money decreases over time, so it is necessary to account for inflation to assess whether a worker is "better off." (ABC News: Sharon Gordon) A familiar topic of conversation On the same day, Chalmers made a similar statement on Twitter: "The average full-time worker is earning about $3,700 more per year."
But he wasn't the only one claiming that wages had risen under the Labor Party: other Labor MPs also claimed that the average full-time worker was "better off."
For example, Aged Care and Sport Minister Anika Wells suggested on September 9 that the average full-time worker was "about $3,700 better off than 12 months ago."
Meanwhile, Labor MP Karina Garland claimed that Australians had earned an "extra" $3,700 in the first year of the government's tenure, while her colleague MP Sam Rae made a similar suggestion on September 12.
Labor MP for Bennelong Jerome Laxale put it slightly differently, claiming that it was "about $3,700 that will go straight back into the pockets of Australian workers."
Tracking average wages Experts told Fact Check that the best indicator for assessing wage growth in dollar terms is ABS data on average weekly earnings.
Average weekly earnings provide a quarterly snapshot of the dollar value of average wage packages across the country.
Previously, Fact Check relied on the Wage Price Index (WPI) to measure wage growth, which shows changes in average hourly wages and wage costs that are not influenced by compositional or structural changes within the workforce.
Janine Dixon, former research manager at the ABS and senior research fellow at the Centre of Policy Studies at Victoria University, said that while the WPI was the best measure for comparing wage growth over time, it did not account for earnings associated with transitioning to higher-paying professions.
The WPI also measures percentage changes over time and does not publish changes in the dollar value of average wages, as Mr. Chalmers claimed.
Therefore, Fact Check relied on data on average weekly earnings to assess the treasurer's claim.
ABS publishes both "original" and "seasonally adjusted" data. The latter removes regular calendar variations to better identify underlying movements and was used in Fact Check's analysis.
What the wage data shows When Labor won the May 2022 election, ABS data showed that the total average weekly earnings of adult full-time employees was around $1,838.30, or $95,591.60 per year.
The latest available data shows that by May this year, this figure had increased by 3.9 percent to $1,907.20 ($99,174.40 per year) — a weekly increase of $71.90, or $3,738.80 per year.
ABS also publishes another measure of "ordinary" earnings that excludes overtime hours.
Based on this, the average full-time worker earned $1,838.10 per week in May 2023 ($95,581.20 per year) compared to $1,769.80 ($92,029.60 per year) in May 2022.
This corresponds to an increase of 3.9 percent, or $68.30 per week ($3,551.60 per year).