University report says a 15 per cent pay increase is justified to make up for lost spending power and current inflation.

Real wages of NSW nurses and midwives have fallen by more than 10 per cent since 2020, said a report from the University of Sydney’s Business School.

It said real wages are now lower than before 2011, when a state Liberal government imposed a 2.5 per cent wages cap for public sector workers.

The term “real wages” means wages adjusted for inflation, to take into account movements in the prices of goods and services.

The report was prepared for the NSWNMA by Professor John Buchanan,  Dr Troy Henderson, and Associate Professor Jo-An Occhipinti.

It said NSW nurses and midwives now “earn less than just about all other professions and many non-

It is time to escape the curse of NSW Treasury’s wage cap and begin the move to wage levels that are compatible with a sustainable nursing and midwifery labour market.’

“Given recent wage agreements this situation is set to worsen, especially in comparison with paramedics.”

The report pointed out that NSW nurses and midwives are paid less than many other states and territories.

NSW ENTRY LEVEL WAGES SECOND LOWEST

At entry level, NSW pays the second lowest rates in the country.

Entry level nurses and midwives in Queensland earn a base rate of $82,753 – 18 per cent more than the $70,050 paid in NSW.

“At the top of the incremental structure, NSW is in the middle of the pack,” the report said.

Top-level RNs and midwives in Queensland earn $106,144 – 8 per cent more than the $98,315 paid in NSW.

The report said that in real terms, the relative pay of NSW nurses and midwives is further behind all other higher paying states and territories, where the cost of living is also “significantly cheaper”. professional occupations, such as real estate agents (by up to $75,000 per annum), finance brokers (by over$100,000 per annum) and many sales representatives (by $10,000 to $20,000 per annum)”.

“Compared to a range of professionals (i.e., occupations requiring a degree to practice) nurses and midwives are among the lowest paid at all ages. The issue is stark among nurses aged over 40,” the report stated.

“Among NSW public sector workers, entry level nurses and midwives are paid less than teachers, police and firefighters (often by margins of 10 to 20 per cent).

WAGES CAP LED TO PAY STAGNATION

The report described the 2.5 per cent wages cap (introduced by the previous Liberal government) as “the direct cause of wage stagnation and rising cost of living pressures for the State’s essential services workforce”.

“Between 2011 and 2023, NSW nurses and midwives’ pay was deliberately suppressed. During that time, no consideration was given to the deepening problems afflicting the profession.”

The wages cap “entrenched uncompetitive wage rates that now result in growing losses of skilled workers – including nurses and midwives – to other states and territories”.

It said, “Given all the above, it is unsurprising that the nursing and midwifery labour market in NSW is under severe stress.

“This is evident in high levels of unfilled vacancies and registered nurses not working in the profession. The labour market is talking – it is time to listen and act.”

After the state Labor government abolished the wages cap in 2023, nurses and midwives received a 4 per cent pay increase, which the report described as “modest”.

“It is now time to devise and implement a sustainable wages policy,” the report said.

It warned that any claim for a wage increase “necessary to put the health system on a more sustainable basis will be met by the usual mantra: ‘nice idea, but we just can’t afford it.’

“This tired narrative should be called out for what it is: the foundations of inefficient wages levels currently contributing to a dysfunctional labour market, marred by high turnover, chronic excess demand, and many registered nurses and midwives not practising in the profession.”

Where has the money gone?

The University of Sydney Business School report said the Australian economy has had the capacity to provide “serious real wage increases”, but these have not occurred.

To the question “Where has the money gone?” it answered – to higher company profits.

“The wages share of GDP (gross domestic product) is now at its lowest level in 50 years: down from a high of over 60 per cent in the 1970s, to just on 50 per cent today.

“On the other hand, the proportion accruing to corporations has risen from 20 per cent of GDP fifty years ago, to 30 per cent today.

“Unless wages settings change significantly, this situation will at best remain stagnant, and at worst these factor shares of national income will become more unbalanced in favour of corporate profits.”