ANZ also promised 10,000 front line and back office workers a 3 per cent increase when it rolled over its agreement last year and similar increases are expected to be negotiated this year.

Officeworks, which employs 6000 staff, recently agreed to 3 per cent increases in the third and fourth year of its agreement.

A raft of retail and fast-food agreements currently before the Fair Work Commission, including McDonald's, Hungry Jack's, Big W, Kmart, BWS and Super Retail Group, are also generally pegging their annual wage increases to minimum wage decisions, which have trended at 3 per cent or above for the past three years.

The linking of wage rises to the annual wage review is a significant shift from past practice where enterprise agreements traditionally shielded retailers from minimum wage increases.

'A good sign for some modest wage acceleration'

University of Melbourne economist Mark Wooden said the shift could mark a break from low wage growth given minimum wage rises have been well above inflation and broader wage growth in the economy.

"It is a good sign for some modest wage acceleration," Professor Wooden said.

He said the agreements may also set the benchmark for wage increases for the broader economy.


"It might slowly feed up the food chain," he said.

"Other large businesses, which may not have quite such low-paid labour, may pick it up. You could see these big companies set the standard on what the going rate is due to their visibility and profile.

"And if low wage labour can get 3 per cent, surely higher skilled labour should be able to make a case for more."

Professionals unlikely to receive pay increases

But recruitment firm Robert Walters said its salary trends data suggested the majority of professionals were unlikely to receive pay increases this financial year aside from "a lucky few".

“The first half of the new financial year will present difficult economic and business conditions to justify widespread wage increases," NSW managing director Andrew Hanson said.

Mr Hanson said supply and demand meant workers in technology, engineering, financial services and infrastructure would see growth, but "professionals outside of these areas are unlikely to see significant increase in salaries".

The dominance of public sector employment in the jobs data may also inhibit further wage growth.


Recent analysis by senior Commonwealth Bank economist Gareth Aird showed public sector employment had grown at an average of 11.6 per cent for the past four years, compared with just 1.1 per cent for the private sector.

NSW Nurses and Midwifery Association secretary Brett Holmes said public sector state wage caps of 2.5 per cent or lower were now having a bigger impact in inhibiting wage growth at a time of rapid increase in employment growth.

"The public sector has traditionally set the market for nurses' [pay] in NSW but it's got to the point that it's fallen behind some of the rates in the major private hospitals," he said.

Employment growth hit 2.9 per cent last month – the fastest rate in more than a year but due to increasing workforce participation – now at a record 66 per cent.

'Tentative signs of stabilisation'

The NAB Business survey for June showed that some of this spare capacity utilisation – which measures how much extra slack in the labour market is being used – recorded a sharp lift across most industries rising to 82.1 per cent from May's 80.9.

Based on historical relationships, the survey results suggests employment will likely grow by about 20,000 positions in the next 6 months.

Economists say the results are a good sign of employment growth and wages.


JP Morgan's Ben Jarman said if the data continued in this fashion then the unemployment rate would ease.

"If these results can hold, it would suggest tentative signs of stabilisation in the labour market owing to prospective policy support (and perhaps political factors post-election), arresting the upward impulse to the unemployment rate of recent months."

Commsec's chief economist Craig James said: "The improvement in private business employment hiring intentions would be welcomed by Reserve Bank policymakers whom are currently fixated on labour market developments."

Reserve Bank governor Philip Lowe has been waiting to see further wage growth, usually a result of when the employment market reaches the full employment level now estimated to be around 4.5 per cent unemployment – well below the current 5.2 per cent.

"A further gradual lift in wages growth is still expected and this would be a welcome development," Dr Lowe said after cutting interest rates earlier this month by 0.25 percentage points to 1 per cent.

"There has, however, been little inroad into the spare capacity in the labour market recently, with the unemployment rate having risen slightly to 5.2 per cent."