The ABS released the Monthly Employee Earnings Indicator (MEEI) for March 2026 today, and it tells a very different story to last week's Wage Price Index.
📊 Total wages and salaries paid hit a series high of $110.6b (up 1.4% MoM, up 6.0% YoY)
💼 Employee jobs rose to 15.47 million (up 1.2% MoM, up 1.0% YoY)
📈 March quarter total wages were $322.7b (up 1.1% QoQ, up 5.7% YoY)
⛏️ Mining led industry wage growth at +8.4% MoM, driven by cyclical bonuses
🏗️ Construction wages fell 0.6% MoM
🏛️ Public sector wages outpaced private sector (up 1.8% vs 1.3% MoM)
Last week the WPI told us wages grew 3.2% in the private sector and 3.3% in the public sector. Steady, contained, nothing to worry about. Today's MEEI tells us that total wages and salaries paid by employers grew 6.0% over the same period. That's nearly double the WPI number. So which one is right?
Both are, they're just measuring different things. The WPI tracks price changes for the same job over time. It deliberately strips out what happens when people switch to higher paying roles, pick up extra hours, move from part time to full time, or when the composition of the workforce changes. It's a clean measure of wage inflation for the same unit of labour. The MEEI captures what actually gets deposited into bank accounts across the economy. It includes all of those compositional effects that the WPI ignores. When people work more hours, take promotions, or move into better paying industries, the MEEI picks it up and the WPI doesn't.
This matters because the RBA doesn't just care about wage inflation per job. It cares about total purchasing power in the economy, because that's what drives demand and ultimately feeds into prices. If households are earning 6% more in aggregate even though the "price" of each job only went up 3.2%, the demand side of the inflation equation looks very different. That's a problem when the RBA is trying to cool an economy that's already running too hot on the cost side thanks to the ongoing Hormuz crisis. The WPI number gives the RBA comfort that wage-price spiral risks are contained. The MEEI number tells them that the demand impulse from household income growth is much stronger than the WPI alone would suggest. When the Board sits down to assess how much further rates need to go, it's the aggregate income picture that matters for demand, not the per-job price.