Wages are failing to keep pace with inflation, despite a tight job market.
File photo. Photo: 123RF
The Westpac McDermott Miller Employment Confidence Index rose 6.6 points in the March quarter to 113.5, which was the highest reading for the index since June 2019 and coincided with a sharp drop in consumer confidence.
A number of under 100 represents pessimism while above was optimistic.
Acting chief economist for Westpac Michael Gordon said employment confidence continued to be led by a perception that jobs were plentiful.
"The tight jobs market means that workers have greater options and more power to negotiate a pay rise. But with the cost of living rising even faster, many households feel that they're struggling to get ahead," Gordon said.
"Employers have been desperately seeking workers over the last year or so, and even with the Omicron variant looming large this year, job advertisements have risen to new highs."
There was also a moderate lift in both reported and expected earnings growth in the March quarter, however, those measures remained below pre-pandemic levels.
"These results highlight how inflation has become the major concern for households," he said.
Market research director of McDermott Miller Imogen Rendall said confidence among public sector employees rose 12.9 points to 128.1, while confidence in the private sector recorded a much smaller rise of 4 points to 106.
"Private sector employees remain concerned about their personal job security over the coming year as well as future job opportunities, while public sector employees are buoyant with a very positive view of both their current employment conditions and their expectations for the future," Rendall said.
