Wages increased 2.3 per cent for the year and 0.7 per cent for the December quarter with the biggest gain for retail workers.
The latest data from the Australian Bureau of Statistics (ABS) shows the number of jobs reporting pay rises was higher than usual for this time of year.
The industries that saw wages rise the most across the last three months of 2021 were retail trade (up 1.2 per cent), public administration and safety industries (up 0.7 per cent) and care and social assistance (up 0.6 per cent).
Annually, those working on accommodation and food services saw wages rise a massive 3.5 per cent.
This was followed by retail trade at 2.6 per cent and manufacturing at 2.5 per cent.
Across the states and territories, Tasmanians have seen the biggest change, with wages in the state rising by 3.2 per cent in the private sector across 2021.
This was followed by the ACT, which saw private sector wages up 2.7 per cent, and Queensland with a rise of 2.5 per cent.
RBA under pressure
Reserve Bank of Australia governor Philip Lowe has said he needs to see three things before he considers lifting interest rates: wages growth, falling unemployment and inflation sustainably within the 2 to 3 per cent range.
The unemployment rate is on track to fall below 4 per cent this year, the most recent inflation data saw underlying inflation at 2.6 per cent and now wages have increased 2.3 per cent annually.
In his most recent statement on monetary policy, Lowe said the bank had been anticipating wages would rise.
“Wages growth has picked up but, at the aggregate level, has only returned to the relatively low rates prevailing before the pandemic,” he said.
“A further pick-up in wages growth is expected as the labour market tightens. This pick-up is still expected to be only gradual, although there is uncertainty about the behaviour of wages at historically low levels of unemployment.”
Australia is currently experiencing a worker shortage, with job ads at historically high levels and the unemployment rate declining.
This has seen some businesses offering major perks - financial and other - to entice and retain workers.