setting wages 2010–12
51This section reports on average wages earned and, to the limited extent possible, how these have changed between 2010 and 2012 for employees covered by different wage-setting arrangements. It does this by comparing the earnings of those covered by enterprise agreements and over-award arrangements with those on awards.
The ABS EEH Survey is conducted biennially on a sample of employees selected from a sample of employers, and contains data on the characteristics of employers and employees.52 Importantly, it is the only current employer survey that contains data on the method of setting pay and earnings. Table 1.8 shows the average weekly total cash earnings by method of setting pay between May 2010 and May 2012. This is the crudest measure of wage-related earnings as it does not control for hours worked. The table shows that on the basis of this general indicator of wage based earnings, award employees on average earn considerably less than those on collective agreements and individual arrangements. The extent of this difference can be summarised by noting what those on awards earn as a proportion of those on either collective agreements or individual arrangements. The data on this are presented in the last three columns of the table. On the basis of this indicator, the difference in
49
Wright S and Buchanan J (2013) Award reliance, Research Report 6/2013, Fair Work Commission, December, Melbourne, Table 3.2.1.
50
Wright S and Buchanan J (2013) Award reliance, Research Report 6/2013, Fair Work Commission, December, Melbourne, Table 3.3.3.
51
The data and initial commentary on this sub-section were prepared by the Fair Work Commission.
52
earnings for those on awards has fallen between 2010 and 2012 compared to those on some form of over-award arrangement. For example, in 2010, those on awards earned 49.5 per cent of what those on collective agreements received. By 2012 this had increased to 55.1 per cent. The same
improvement occurred when compared with those on individual arrangements. Award employees’ earnings increased from 45.4 per cent to 49.6 per cent of the earnings of employees on individual arrangements. This is due primarily to the large increase (10.4 per cent) in earnings for those on awards over the period. This is much greater than the increase for those on collective agreements (4.7 per cent) and individual arrangements (5.6 per cent).
Table 1.8: Average weekly total cash earnings by method of setting pay, May 2010 and May 2012 2010 2012 2010 Award only as a % of… 2012 Award only as a % of… Annualised percentage change $ $ % % % Award only 520.00 633.80 10.4 Collective agreement 1050.60 1150.80 49.5 55.1 4.7 Individual arrangement 1146.10 1277.20 45.4 49.6 5.6
Source: ABS, Employee Earnings and Hours, Australia, various years, Catalogue No. 6306.0.
Table 1.9 reports on average weekly total cash earnings by method of setting pay across industries in May 2012. It shows that the difference in earnings between employees covered by awards and employees covered by either a collective agreement or an individual arrangement was the largest in Finance and insurance services; Rental, hiring and real estate services; and Professional, scientific and technical services.
In contrast, the difference in earnings between employees covered by an award and employees covered by either a collective agreement or an individual arrangement was the smallest in Accommodation and food services; Transport, postal and warehousing; Health care and social assistance; and Public administration and safety. For Retail trade, the gap in earnings was very small between employees covered by awards and employees covered by collective agreements, but relatively large between employees covered by awards and employees covered by individual arrangements.
Further, the difference in earnings between those on awards compared to those on collective
agreements in Accommodation and food services shows that those on awards—using this indicator— were earning more than those on collective agreements. This outcome may be due to a greater proportion of part-time workers covered by collective agreements than awards. The findings for the Accommodation and food services industry highlight the care that should be exercised when using this indicator to compare earnings of those covered by different methods of pay-setting. The same need for caution is also required when differences in occupational earnings are considered.
www.fwc.gov.au Research Report 7/2013 37 Table 1.9: Average weekly total cash earnings by method of setting pay by industry (1-digit ANZSIC), May 2012
Award only Collective agreement Individual arrangement Award only as a % of collective agreement Award only as a % of individual arrangement $ $ $ % % Mining 1423.70 2222.30 2532.50 64.1 56.2 Manufacturing 613.80 1304.10 1294.00 47.1 47.4 Electricity, gas, water and waste
services
917.70 1749.90 1860.10 52.4 49.3 Construction 831.90 2114.50 1334.10 39.3 62.4 Wholesale trade 687.40 1114.50 1351.20 61.7 50.9 Retail trade 475.80 490.50 972.40 97.0 48.9 Accommodation and food services 475.00 398.30 736.20 119.3 64.5
Transport, postal and warehousing 930.80 1362.80 1224.80 68.3 76.0
Information media and telecommunications
678.50 1280.50 1609.20 53.0 42.2
Finance and insurance services 569.70 1379.60 1570.70 41.3 36.3
Rental, hiring and real estate services
533.70 1147.30 1136.50 46.5 47.0
Professional, scientific and technical services
609.10 1534.40 1520.80 39.7 40.1
Administrative and support services
595.30 1225.20 1267.10 48.6 47.0 Public administration and safety 1148.90 1351.50 1648.20 85.0 69.7
Education and training 784.70 1154.30 803.80 68.0 97.6
Health care and social assistance 888.70 1057.70 1065.10 84.0 83.4
Arts and recreation services 401.50 731.30 962.70 54.9 41.7
Other services 595.60 967.60 954.70 61.6 62.4
All industries 633.80 1150.80 1277.20 55.1 49.6
Note: Excluding the All industries row, bold text represents the top five figures for each measure, while italicised text represents the bottom five figures for each measure.
Source: ABS, Employee Earnings and Hours, Australia, May 2012, Catalogue No. 6306.0.
Table 1.10 shows the average weekly total cash earnings by method of setting pay across
occupations in May 2012. By occupation, the difference in earnings between employees covered by awards and employees covered by collective agreements was large for most occupations except for Sales workers (86.9 per cent) and Professionals (83.4 per cent). The difference appears to be particularly large for Technicians and trades workers (45.2 per cent).
In contrast, the difference in earnings by occupation between employees covered by awards and employees covered by individual arrangements was smaller than the gap for collective agreements in most occupations. The difference was large for Sales workers (45.0 per cent), Managers (53.7 per cent) and Technicians and trades workers (55.4 per cent). It was particularly small for Community and personal service workers (92.4 per cent).
Table 1.10: Average weekly total cash earnings by method of setting pay by occupation (1-digit ANZSCO), May 2012
Award only Collective agreement Individual arrangement Award only as a % of collective agreement Award only as a % of individual arrangement $ $ $ % % Managers 1115.30 1984.90 2078.50 56.2 53.7 Professionals 1157.80 1387.70 1515.30 83.4 76.4 Technicians and trades workers 700.30 1547.70 1265.00 45.2 55.4 Community and personal service workers 541.60 837.20 586.30 64.7 92.4 Clerical and administrative workers 706.50 1065.40 964.30 66.3 73.3 Sales workers 422.10 485.80 937.10 86.9 45.0 Machinery operators and drivers 862.30 1508.00 1157.30 57.2 74.5
Labourers 492.40 945.90 790.10 52.1 62.3
All occupations 633.80 1150.80 1277.20 55.1 49.6
Source: ABS, Employee Earnings and Hours, Australia, May 2012, Catalogue No. 6306.0.
These differences only concern total weekly cash earnings for occupations considered at the highest level of generality or disaggregation. The problem of not controlling for hours was highlighted in the industry analysis by reflecting on the situation in Accommodation and food services. These problems are just as relevant to statistics reported on an occupational basis. For example, detailed
consideration of one of the largest professional groups, registered nurses, highlights that when skill level and hours are controlled for, not only does the scale of apparent differences between earnings and mode of wage-setting change,the relative earnings of workers under the different modes of wage- setting also change.
This more disaggregated material from the EEH for nurses is reported in Table 1.11. This is more precise than aggregate occupational figures on two counts. First, it reports on the situation for full-time workers only and their ordinary time (not total) weekly earnings. Second, it reports on an occupation at a much more precise level, ensuring people with roughly common skills and qualifications are compared. These controls suggest a very different association between methods of wage-setting and earnings. Amongst Registered Nurses, there is little difference between those on awards and
collective agreements. More importantly, those on awards are, on average (and using these categories), paid more than those on individual arrangements. These numbers highlight the
importance of paying close attention to the level of aggregation and how it can affect findings. Among nurses, this could be due to a higher proportion of junior nurses or those in lower paid sectors (such as general medical practices and aged care) that have their pay set by individual arrangements. Similarly, the patterns for secondary school teachers show that secondary school teachers on awards are the best paid.
www.fwc.gov.au Research Report 7/2013 39 Table 1.11: Average weekly ordinary time earnings for full-time Registered Nurses and Secondary School Teachers, May 2012
Award only Collective agreement Individual arrangement Award only as a % of collective agreement Award only as a % of individual arrangement $ $ $ % % Registered nurses 1,581.30 1,607.60 1,408.4 98.4 112.3 Secondary school teachers 2,199.50 1,594.90 1,643.50 137.9 133.8 Source: ABS, Employee Earnings and Hours, Australia, May 2012,(Catalogue No. 6306D009_201205.
Problems of aggregation in ABS earnings data highlight the importance of examining the nature of earnings in as much detail as possible. Such material is, however, difficult to obtain and once obtained, difficult to analyse. One of the few readily available detailed sources of information on movements in over-award earnings are registered enterprise agreements. As noted earlier, extensive data on these (in the national workplace relations system) is maintained by the federal Department of Employment in its WAD. Because this source is a full count of enterprise agreements, extensive work can be done with time series and highly disaggregated categories of analysis, free of the problem of sample size issues.
The next sub-section presents an analysis of wage movements using AAWI in registered enterprise agreements from the WAD. This analysis covers trends over the last decade and especially the years 2010–13. The WAD represents a full count of federal enterprise agreements, rather than a sample. It can present highly disaggregated categories of wage movements without sample size issues.