Wage growth in Australia has hit a new low, increasing by only 2.2 per cent in the 12 months to December 2015. And at the same time, unemployment is back up to 6%.
The latest wages figures represent the worst result for workers that’s been recorded since the Australian Bureau of Statistics (ABS) started measuring wage growth back in 1998.
It would have been worse in the Great Depression, of course, but that’s not much comfort for working people currently struggling to pay mega-mortgages and to meet the rising costs of basic services such as health and education.
Meanwhile, unemployment has remained stubbornly high.
So much for the argument that pushing down workers’ earnings, including penalty rates, will create more jobs!
The truth of the matter is that around the world employers are using falls in real wage levels to boost their profits without then ploughing that money back into the economy through investment that creates jobs.
The financial sector is doing the same, using cheap money, available at low and even negative interest rates, to enrich the already rich, creating a huge global financial bubble in the process.
What Australia needs is policies to promote productive investment and at the same time to protect local jobs and boost earnings. Leaving it all up to the Reserve Bank to boost growth through a low interest rate regime obviously isn’t working.