The Days of 4% Pay Rises Are Behind Us
Wage growth in Australia has finally slowed, with the latest figures showing private-sector wages barely keeping pace with inflation. The Reserve Bank of Australia (RBA), which closely monitors these numbers, is now facing a reality that its cherished notion of a tight labour market may not be as strong as it once thought.
For years, the RBA has been convinced that a low unemployment rate and intense competition for jobs would lead to rapid wage growth. However, in the September quarter, private-sector wages grew just 0.7%, down from 0.8% in the previous quarter and 0.9% in the first three months of this year. This trend has been consistent across the board, with annual figures showing that wage growth is slowing.
One politician who seems oblivious to these facts is Tim Wilson, the shadow minister for industrial relations, employment and small business. In a misguided attempt to score points against the Albanese government, he claimed that the public sector's 3.8% wage rise was evidence of the private sector being outpaced by public spending. However, this ignores the fact that state government pay rises contributed an astonishing 82% of public sector wage growth, while commonwealth public service pay contributed a mere 0.04%.
This disconnect highlights a larger issue. Public-sector wages have grown significantly over the past year, with 14.2% growth compared to 15.2% in the private sector. However, this has not translated into meaningful gains for employee households, which have seen their real wages fall by 0.6% since March 2021.
The consequences of this slow wage growth are dire. With prices rising 21.8% and the cost of living increasing 26.6%, it's clear that many workers are struggling to make ends meet. In fact, if average full-time earnings had kept pace with inflation, they would now be worth $90,000, compared to a meagre $85,862 in reality – a loss of $4,138.
Worse still, the RBA's own projections suggest that it will take until 2044 for real wages to recover from their current state. This is a stark reminder that the policy levers are currently geared towards treating wage growth as something to prevent, rather than something to support workers and the broader economy.
As such, policymakers would do well to re-examine their priorities and focus on supporting workers in the face of stagnant wages and rising costs. Anything less risks perpetuating a cycle of slow growth and widening inequality.
Wage growth in Australia has finally slowed, with the latest figures showing private-sector wages barely keeping pace with inflation. The Reserve Bank of Australia (RBA), which closely monitors these numbers, is now facing a reality that its cherished notion of a tight labour market may not be as strong as it once thought.
For years, the RBA has been convinced that a low unemployment rate and intense competition for jobs would lead to rapid wage growth. However, in the September quarter, private-sector wages grew just 0.7%, down from 0.8% in the previous quarter and 0.9% in the first three months of this year. This trend has been consistent across the board, with annual figures showing that wage growth is slowing.
One politician who seems oblivious to these facts is Tim Wilson, the shadow minister for industrial relations, employment and small business. In a misguided attempt to score points against the Albanese government, he claimed that the public sector's 3.8% wage rise was evidence of the private sector being outpaced by public spending. However, this ignores the fact that state government pay rises contributed an astonishing 82% of public sector wage growth, while commonwealth public service pay contributed a mere 0.04%.
This disconnect highlights a larger issue. Public-sector wages have grown significantly over the past year, with 14.2% growth compared to 15.2% in the private sector. However, this has not translated into meaningful gains for employee households, which have seen their real wages fall by 0.6% since March 2021.
The consequences of this slow wage growth are dire. With prices rising 21.8% and the cost of living increasing 26.6%, it's clear that many workers are struggling to make ends meet. In fact, if average full-time earnings had kept pace with inflation, they would now be worth $90,000, compared to a meagre $85,862 in reality – a loss of $4,138.
Worse still, the RBA's own projections suggest that it will take until 2044 for real wages to recover from their current state. This is a stark reminder that the policy levers are currently geared towards treating wage growth as something to prevent, rather than something to support workers and the broader economy.
As such, policymakers would do well to re-examine their priorities and focus on supporting workers in the face of stagnant wages and rising costs. Anything less risks perpetuating a cycle of slow growth and widening inequality.
, like they're trying to justify their own increases by saying the private sector isn't keeping up... newsflash, rba: we've had 3+ years of stagnant wages, inflation's through the roof, and you guys are still going on about labor markets 
. The RBA's whole 'tight labour market' gig was just a myth, a smoke screen to justify low wages for workers. And now that it's out in the open, we're seeing the real impact – people struggling to pay their bills and make ends meet.
, but ignoring the fact that public sector wage growth is a whole different beast. I mean, if 82% of that growth came from state governments, what does that say about the private sector? That it's not keeping pace with the rest of us? It's like they're saying, 'Hey, we'll just focus on you, private sector, and leave everyone else behind.'
. 2044 for real wages to recover? That's like giving up hope 
. We need policymakers to take action now, not wait around for some magic number. It's time to put workers first and stop playing politics with their hard-earned cash 
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I remember when my friend's cousin was working as a mechanic back in '02, he used to earn like $40k a year and that was decent. Nowadays it feels like they're barely scraping by. The fact that real wages haven't kept pace with inflation is just wild. It's not fair to the workers who are struggling to make ends meet 
. We need some policy changes ASAP!
. I mean, we've had years of 'tight labour market' and what do we have to show for it? Slow wage growth and people struggling to make ends meet 
. And don't even get me started on politicians like Tim Wilson trying to score points off other people's struggles... it's just shameful 
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so another year where wage growth is basically non-existent? it's like the economy is just holding its breath waiting for something to happen, but honestly when is that gonna be? 0.7% growth in private sector wages is like saying you're still alive because you haven't died yet. not exactly a cause for celebration.
, like he thinks we're all stupid enough to believe that. newsflash: public sector wages are way up because of inflation, not because they're outpacing private sector growth.
. gotta do better than that, politicians!
They're still stuck on that low unemployment rate thing, but it's like they forgot about inflation and cost of living 
. It's not about outpacing public spending, it's about keeping up with prices 
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. I've got sources that say they're freaking out over here because their precious notion of wage growth isn't holding up.
. And it's not like they're even addressing the underlying issues – it's all just about preventing wage growth from happening.
. Anything less is just enabling more inequality and slow growth. We need real change here, not just more of the same old spin 
if private sector wages are barely keeping pace with inflation, that means it's not as competitive as they think 
instead of addressing the real issue - public sector pay rises 
- the real issue here is that policymakers need to put workers first 
. It's time for us to shift our focus from just preventing wage growth to actively supporting workers who are struggling to make ends meet 
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. It's like they're saying "we're outpacing you" when really we should be trying to support each other 
. The fact that state government pay rises made up 82% of public sector growth is just crazy, and yet our politicians are still going on about how the private sector is being outpaced by public spending 
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. The RBA needs to rethink its approach and start prioritizing wage growth sooner rather than later. It's not like they're stuck in the past; they know the private sector is growing, so why can't they work with that? 
- 0.7% growth in the private sector, yeah that sounds great but for who? Not the average worker who's struggling to make ends meet 
. Like, what's taking so long?! And don't even get me started on Tim Wilson saying public sector pay rises are evidence of private sector being outpaced by public spending... come on dude