Wages are growing at their slowest rate since 1997 and are being outpaced by inflation, according to Australian Bureau of Statistics figures.
The ABC reports that the ABS’s Wage Price Index, which has been tracked since 1997, showed the most recent quarter’s wages growth was 0.7 per cent and the most recent year was 2.6 per cent: the slowest growth since records have been kept. These figures do not include bonuses.
Private sector wages growth was at an annualised 2.5 per cent.
Compared to the bureau’s Consumer Price Index (CPI) of 2.7 per cent in the most recent figures, real wages are falling.
Meanwhile, unemployment crept up to a decade-long high of six per cent last month, according to The Australian Financial Review.
The announcements of job losses, including high-profile closures at Toyota Australia and Alcoa, have been claimed as evidence of the need for labour market reform by some economists.
“The more job losses there are, maybe the light bulb will go off in the general populace that the industrial relations landscape is overly-regulated,” JPMorgan’s Stephen Walters is quoted by the AFR as saying.
“We know there’s been some wage pressure in areas such as the offshore supply industry and key mining spots, but across the whole economy there’s been a pretty marked deceleration, similar to what happened during the global financial crisis.”
Some are unconvinced by calls for reform, with one columnist at The Sydney Morning Herald, for example, questioning why the historically low growth rate in wages has become an issue.
“Private sector wages rose just 2.5 per cent, yet our leaders would have us believe this historically low growth rate has pushed Holden, Toyota, Alcoa, SPC and Qantas to the edge,” he wrote.
"A few years back manufacturing wages were rising at 4 per cent. It is reasonable to ask why the present much lower growth rate (2.8 per cent) should cause problems when the higher rate of 4 per cent did not."