Private sector wage growth in Australia has hit a new low according to figures just released by the Australian Bureau of Statistics.
Wages in the private sector (excluding bonuses) grew by just 1.9% in the year to June, after rising by just 0.4% in the last (June) quarter. These figures mean that wages are now growing at a slower rate than at any time since the ABS began publishing such figures nearly 20 years ago.
Pay rates in the private sector have dropped steadily from 2.5% two years ago.
And workers in the public sector are not doing much better. Public sector rates have also hit a new low of 2.3% a year, down from 2.5% the previous quarter.
These figures may be good news for some individual companies, but they are bad news for wage earners and for the economy as a whole. Inflation may be low over-all, but mortgages are not. And tight budgets means low demand for goods and services, less investment and fewer jobs.
A stronger role for government in job creation is part of the answer to the risks of a deflationary spiral. But a strong organised labour movement is equally necessary both for maintaining decent living standards and shoring up broad-based effective demand across the economy.
Unfortunately, the Coalition government does not seem to understand this simple proposition.