WAGES BOOM

How pay pack­ets will grow –

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W AGES in South Aus­tralia are on the brink of surg­ing, driven by the min­ing and de­fence boom which has pushed wages higher in other states.

The state’s av­er­age weekly wage had the third slow­est growth in the past 15 years of 64.3 per cent while the pay pack­ets of work­ers in re­source-rich states West­ern Aus­tralia, Queens­land – and North­ern Ter­ri­tory – surged by up to 91.1 per cent.

Queens­lan­ders went from be­ing the sec­ond low­est earn­ing work­ers in Aus­tralia to the fourth high­est earn­ing, while West Aus­tralians soared from the mid­dle of the pack to be the sec­ond high­est earn­ing work­ers. Aus­tralian Bureau of Stat- is­tics fig­ures show South Aus­tralian work­ers on av­er­age take home more than $100 less each week, or $842.90 (pre tax), than the other three min­ing states.

South Aus­tralians now take home the sec­ond low­est weekly pay packet in the na­tion, com­pared with the third low­est wage in 1995.

Economists, how­ever, pre­dict in­creased min­ing and de­fence ac­tiv­ity will cause wages to rise in com­ing years as it has in other states.

Prescott Se­cu­ri­ties chief econ­o­mist Dar­ryl Gob­bett says SA’s wages al­ways have tended to be lower than the na­tional av­er­age but there is a change un­der way with the state’s ma­jor in­dus­tries. He says the state has re­lied on man­u­fac­tur­ing and now is more ser­vice-ori­ented.

Man­u­fac­tur­ing it­self will change to pro­vide equip­ment for min­ing and de­fence and ser­vice in­dus­tries will be­come stronger, he says.

‘‘I think South Aus­tralian em­ploy­ers need to get used to the idea – both with struc­tural changes in the econ­omy and de­mo­graphic changes that are af­fect­ing us – that the rel­a­tive wages growth is go­ing to be stronger than they are used to in the past,’’ he says.

‘‘SA will catch up to east­ern state’s wages. ‘‘That’s part of the process.’’ BIS Shrap­nel chief econ­o­mist Frank Gel­ber last month told an Eco­nomic Out­look Brief­ing con­fer­ence in Ade­laide that West­ern Aus- tralia and Queens­land had had their min­ing in­vest­ment booms. This yet was to oc­cur in SA. The ex­pected ex­pan­sion of the Olympic Dam mine in the state’s Far North will cre­ate jobs for about 10,000 work­ers di­rectly at the site.

Work could be un­der way from 2012.

Mr Gob­bett says SA has had an older pop­u­la­tion, with more re­tirees and work­ers near­ing re­tire­ment age tak­ing on less hours, but they still spent money on goods and ser­vices.

Com­bined with a lo­cal work­force which is not as ed­u­cated or trained as in other states, this also has con­trib­uted to a lower av­er­age wage.

Spe­cialised work­ers will be re­quired to fill the min­ing jobs and

many will have to come ready­trained and skilled, from ei­ther in­ter­state or over­seas.

As more peo­ple re­ceive the high wages in min­ing, the state’s av­er­age wage will in­crease.

More peo­ple, how­ever, will be needed in other in­dus­tries to cater for as­so­ci­ated busi­ness with min­ing and de­fence.

Skilled work­ers will de­mand higher pre­mi­ums, Mr Gob­bett says.

‘‘The le­gal sec­tor ex­pe­ri­enced a surge in the num­ber of peo­ple em­ployed from 2006 to 2008 be­cause as new min­ing com­pa­nies were formed, they were needed to ser­vice the busi­ness,’’ he says.

‘‘Com­mer­cial prop­erty is do­ing well as min­ing com­pa­nies start up and the hous­ing in­dus­try here also has held up very well be­cause we have got th­ese peo­ple com­ing in from over­seas from skilled work­force ar­eas.

‘‘Of­ten the av­er­age may re­flect peo­ple com­ing into South Aus­tralia to fill th­ese par­tic­u­lar jobs.’’

He says em­ploy­ment con­sul­tancy is also a growth area be­cause of the struc­tural changes that are un­der way in in­dus­tries.

More re­tail, health, hos­pi­tal­ity and ed­u­ca­tion work­ers will be needed as the pop­u­la­tion grows, such as when an army bat­tal­ion sets up at Ade­laide’s Ed­in­burgh RAAF base next year.

The spin-off jobs cre­ated could be much greater than the ac­tual num­ber of jobs di­rectly as­so­ci­ated with a ma­jor project.

Mr Gob­bett says wages in th­ese sec­tors also will need to rise to en­sure de­mand is met and qual­ity staff are em­ployed.

Work­ers in the Aus­tralian Cap­i­tal Ter­ri­tory took home the na­tion’s high­est av­er­age weekly wage of $1106.20 a week be­cause of its high pro­por­tion of top-level pub­lic sec­tor staff.

ACT work­ers also were the na­tion’s big­gest earn­ers in 1995.

West Aus­tralians closely fol­low as the sec­ond high­est earn­ers, with an av­er­age of $1018.30 a week.

Tas­ma­ni­ans had the low­est wage growth of 55.1 per cent.

They earn the low­est wage of $778.00 a week.

NSW work­ers were the sec­ond high­est earn­ers in 1995 but now earn the fifth high­est av­er­age weekly wage of $958. The na­tional av­er­age weekly wage is $938.

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