Wages are tricky business. Just when it feels like they’re moving in the right direction, inflation comes rushing in, threatening to undo all the progress. And that’s where we find ourselves right now. The latest figures from the Australian Bureau of Statistics (ABS) show that, for now, workers are getting a slight edge. But will it last?
The Numbers Behind the Story
Over the year to September 2025, wages grew by 3.4%, reports the ABS. On the surface, that sounds pretty solid—after all, it’s slightly above the inflation rate of 3.2%. This means, for the first time in a long while, many Australians are seeing their purchasing power increase. Real wages, after adjusting for inflation, have now grown for eight straight quarters. That’s the longest stretch of real wage growth we’ve seen in almost a decade. Good news, right?
An Economic Flip Ahead?
Well, not so fast. Economists are sounding the alarm. The same people who forecasted this steady growth are now predicting a shift. As inflation edges higher and wage growth slows, real wages are likely to dip in the coming months. It’s a sobering thought: the rise in wages could soon be outpaced by rising prices, turning that positive trend into a negative one.
Public vs. Private Sector Wage Growth
Interestingly, public sector workers seem to have fared better than their private-sector counterparts. On average, state government employees received a 3.8% wage increase, while private sector wages grew by just 3.2%. And here’s a fun fact: 82% of this public sector wage growth came from state government workers. That’s a pretty specific breakdown, but it paints a picture of who’s really benefitting.
But it’s not all doom and gloom. There’s a silver lining. The Reserve Bank of Australia (RBA) seems reassured that wage growth, while steady, isn’t spiraling out of control. So, at least for now, the risk of an overheating economy seems less likely.
A Cooling Off Period Ahead?
Looking ahead, though, we might see wage growth continue to cool. The numbers are pointing toward a potential plateau. And while that’s a bit of a letdown, it’s not all bad. Slow and steady, as they say, keeps the economy on track without causing inflation to run wild. So, while workers might not see the same kind of wage jumps next year, the stability could be just as important.
In the end, the story of wages is a balancing act. As inflation rises and economic conditions shift, the real challenge will be keeping that balance intact. But for now, workers can rest easy knowing they’ve had a brief window of progress. It might not last forever, but it’s something to hold on to. For now, anyway.
