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No magic wage rise: Wage response from pauses to the SG rate

  Published: 29 Oct 2020

Pausing or cutting the Super Guarantee has left worker worse off as employers did not increase wages to compensate for lost super, an analysis of more than 8000 workplace agreements show. 

This Industry Super Australia briefing note explores what occurs when legislated increases in the SG are abandoned, as they were in 2014.

It examines wage outcomes struck in enterprise bargaining agreements (EBA’s) in the period when the scheduled increases were legally binding on employers when agreements were negotiated and then subsequently when they were not.

This analysis examines 8,370 agreements made in the period 2 January 2013 to 21 December 2018 

The key findings were:
• The average wages growth in agreements certified just before the 2013 election under the legislated schedule was around the same as agreements certified after the budget announcement to freeze the SG at 9.5 percent;
• The average remuneration increase (inclusive of wages and super) was higher for agreements certified before the 2013 election 3.57% p.a compared to 3.28% p.a for agreements after the freeze (a reduction of 0.29% p.a)
• Analysis of subsequent agreements shows there was no ‘catch up’ wage increase for agreements certified before the 2013 election compared to those certified afterwards;
• The wage outcomes observed in the different periods were not sensitive to the economic conditions.

*The above material, whilst correct at the time of publication may include references or statements which are no longer current.

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