Yesterday the University of Sydney administration provided a salary offer as part of the ongoing negotiations with the NTEU over the next Enterprise Agreement. This offer includes a 15.4% (compounded) increase in salary out to 2026. With our currently high rates of inflation it’s pertinent to compare this offer against increases in the cost of living.
Taking into account CPI rises reported and forecast by the RBA, and past salary increases under the previous EBA, under this proposal real wages in 2026 would fall 4.1% relative to 2017.
For example, the figure below shows a Level B (step 1) academic would see their nominal salary increase from $102,013 in 2017 to $130,628 in 2026. Their real salary would decline from $102,013 in 2017 to $97,832 in 2026. The shaded region is the salary forecast.
Year | | Salary increase | Inflation | Level B Step 1 nominal salary | Level B Step 1 real salary (2017 $) | Real wage change relative to 2017 |
2017 | | | | $102,013 | $102,013 | |
2018 | | 2.1% | 2.1% | $104,155 | $102,013 | 0% |
2019 | | 2.1% | 1.6% | $106,343 | $102,515 | 0.49% |
2020 | | 2.1% | -0.3% | $108,576 | $104,983 | 2.91% |
2021 | | 2.1% | 3.8% | $110,856 | $103,264 | 1.23% |
2022 | | 2.1% | 6.1% | $113,184 | $100,248 | -1.73% |
2023 | Forecast | 4.6% | 6.75% | $118,390 | $99,014 | -2.94% |
2024 | Forecast | 3.3% | 3.5% | $122,238 | $97,134 | -4.78% |
2025 | Forecast | 3.3% | 3% | $126,211 | $97,370 | -4.55% |
2026 | Forecast | 3.5% | 3% | $130,628 | $97,842 | -4.09% |
I’m sure this is all completely understood by the administration and NTEU bargaining teams. I hope the administration's offer opens up space for the NTEU to counter-offer and for both sides of the bargaining table to come to an agreement soon. Edit 24/02 As others are rightly pointing out, high inflation is partly how we pay for the costs of the pandemic. So a real-wage decline isn't necessarily unreasonable. Also relevant is private-sector wage growth. If the pay increases are comparable to private sector wage growth—which appears to be the case here—then that's a further reason that current proposed salary increases, despite being likely declines in real wages, are reasonable.
An excel sheet with the numbers is available here.