In our offices, there are often hushed conversations. “How much is she earning?” or “There’s no way he deserves the money we reckon he’s on”. And while executive salaries, which are often exorbitant, get a lot of attention many of us wonder whether we’re getting paid fairly for the work we do.
Determining that can be tricky. Then there’s the question of whether you’re being paid “enough” – whatever that means for you. So, what do most Australians earn?
The National View
According to the Australian Bureau of Statistics’ most recent data the median weekly pay-packet for full-time employees was $1261. There was a disparity, sadly but not unsurprisingly, with men collecting $1342 from the paymaster each week compared to $1187 for women. However, women have been catching up over recent years with salaries for men not recording any growth for two of the last three years while women’s pay-packets have increased each year.
Men get paid slightly more per hour in full-time roles while women fare better in part-time gigs.
When you break this down state by state (or territory) and look at average salaries as well as medians, we see the following.
|City||Median Weekly salary||Average Weekly salary|
In other words, the average salary is substantially higher than the median.
A Quick Explainer On Medians And Averages
Determining the average salary of all full-time people is calculated by adding all the salaries and dividing by the number of people. The median is the middle value in a range of salaries.
For example, let’s say we have a group of nine employees with salaries of $91,000, $84,000, $56,000, $90,000, $70,000, $65,000, $90,000, $92,000, and $30,000.
If we add all those and divide by nine (the number of people) we get an average of $74000.
If we arrange those numbers in ascending order, the value in the middle, or the median, is $84000.
The average has been dragged down substantially by the lower salary in the group.
So, when we look at data coming from the ABS or other places, it’s a good idea to know the different terms being used.
What Does All This Mean?
While politicians often use average salaries as a way of justifying decisions around policies such as tax cuts the reality is, they aren’t necessarily the best indicator of what people are actually earning. In every major city (the ABS also has data that looks statewide and not just at the major capitals) the data reveals the same pattern – average salaries are substantially higher than medians.
That means there are more people earning less that the average. Just as in the example I used to illustrate the difference between an average and a median, where the “outrider” value of $30000 pulled the average down, the same can happen when there are more high income earners than low income earners.
This is what we see with the salary data coming from the ABS. With the median values substantially lower than the average, there’s a high number of people earning low incomes, thus pulling the median down, while there are fewer high income earners, but who are earning extremely high salaries dragging the average up.
The data suggests that most Australians are earning salaries that fall between the average and the medians in their respective cities or states. If you’re earning the average salary or more based on where you live then you’re getting paid more than most people. But if you’re closer to the median, then you’re in a large short of earners but you’re pay packet is lighter than the average.
This story has been updated since its original publication.