Total pay growth over the 12 months to February 2011 moderated somewhat to 4.6 per cent. According to the Melbourne Institute Wages Report wage expectations rose further, to 3.5 per cent, well above the Reserve Bank of Australia’s (RBA) inflation target band.

According to Dr. Edda Claus, a Research Fellow at the Melbourne Institute, “Growth in basic hourly wages over the past twelve months was in line with growth in total pay. The fact that basic hourly wage growth is catching up to total pay is adding to the concern that inflation pressures are rising in Australia”

Dr. Claus added: “All skill groups except para-professionals and tradespersons experienced substantial rises in pay of around 7 per cent and above for those reporting a change, which translates into 4.5 per cent and above for the entire groups.”

The Melbourne Institute Wages Report reports pay changes over the preceding 12-month period and pay expectations for the next 12 months. The report provides information on the dispersion of pay changes across different groups.