WPI: Worst Real Wage Decline This Century

Australia Institute

“The latest wages data show that real wages in the past 12 months fell 2.5%. This horror result for workers shows that not only are wages not putting pressure on inflation but that workers are not seeing the benefits of lower unemployment,” said Greg Jericho, employment & fiscal policy director at the Australia Institute’s Centre for Future Work.

“Real wages are now below what they were at the last election and are essentially no different from where they were at the September 2013 election,” Dr Jericho said.

“Real wages have continued to collapse. Today’s figures confirm the worst real wage decline this century. The latest release of the Wage Price Index shows that over the last 12 months real wages have fallen 2.5%,” said Matt Grudnoff, senior economist at the Australia Institute.

“This represents the biggest destruction of real wages in Australia since records began. Looking at it on an annual basis and including the forecast in the budget estimates for next year we can see the unprecedented fall from 2021 to 2022 of real wages, which are expected to fall 3.5%.

“This underscores the fact that low unemployment is not stimulating wage growth, and government intervention is required.

“The anecdotal stories of big wage increases that have been told by business appear to be isolated incidents.

“The record low unemployment rate does not appear to have induced any major increase in wages. Wage growth has returned to the anaemic pre-pandemic levels,” Mr Grudnoff said.

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