Drop in wages reflects ‘turbulent time’ for hospitality, retail sectors
A decrease in the hourly rate of hospitality and retail workers indicates the challenges currently facing these sectors, says Employment Hero.
Employment Hero's latest SME Index for May indicates that hospitality and retail workers saw a monthly decrease of 1.3 per cent since April, which follows the downward trajectory since the start of 2024.
The overall hourly rate across Australia also fell for the month of May, falling 1.4 per cent down to $38.67. However, year-on-year, the average rate increased 8 per cent.
Employment Hero said the retail and hospitality sector also saw a decrease in the number of hours worked, highlighting the turbulent time these business are currently in.
Median hours dropped by 2.5 per cent, the biggest dip of all industries.
"As restaurants and retailers shut shop across the country, more pain may be on the horizon for workers in these businesses," the HR and payroll software firm said.
The index showed that more broadly the median hours worked remained relatively stable across most sectors, with an average of 141.9 hours per month.
Construction and trade employees worked the most hours, equating to 167.7 in May. This represented a 0.4 per cent drop month-on-month; the lowest drop of all other industries.
The healthcare sector saw the second highest number of hours worked with an average of 105.1, a 1.1 per cent drop in May, aligning with an overall growth trajectory seen in this sector.
Employment Hero senior insights manager Eddie Kowalski said the healthcare sector continues to show high numbers of hours worked despite a slight drop, reflecting its critical role and growth trajectory which can somewhat be attributed to a rising population.
"However, the significant decrease in hours in the retail and hospitality sector highlights ongoing challenges and the need for strategic adaptation to shifting consumer behaviours, but even more so, it represents yet another concrete sign of struggle that signals a greater need for government support for small businesses," said Kowalski.
Thompson said the retail and hospitality sector is particularly vulnerable in the current economic climate.
"Business owners are strapped for cash and the declining wages and reduced hours are symptomatic of broader financial pressures these businesses are facing," said Thompson.
"This trend not only impacts employees but also overall consumer spending and economic stability. Addressing these challenges is crucial for the health of the broader economy, and businesses need to now explore sustainable strategies to navigate these challenges and support their workforce as a direct result.”
