The research, by The Australia Institute’s Centre for Future Work, reveals that until recently, government policies reinforced economic trends that eroded workers’ power.

This erosion normalised low wage growth in Australia for both union and non-union workers.

The report – The Curious Incident of Low Wages Growth – found that of the 16 key developments in the labour market over the past half century, 14 reduced workers’ power, one increased the power of female workers only and just one increased the power of all workers.

From 2014, the majority of federal legislation buttressed this trend and further reduced workers’ power.

Since the election of the Albanese government in 2022, almost all federal legislation impacting wages has done the opposite. It has increased workers’ power. And this may continue, with the government seeking a pay rise above the rate of inflation for low-paid workers in its submission to the Fair Work Commission’s annual wage review.

“These findings dispel the idea that governments can do nothing about wages,” said Professor Emeritus David Peetz, Laurie Carmichael Distinguished Research Fellow at The Australia Institute’s Centre for Future Work and author of the report.

“This report solves the mystery of why wage growth has been so low, despite a tight labour market and a brief surge in inflation.
“Why was there no wages explosion? The answer is that workers have lost a lot of power since the last wages explosion in the 1970s. Almost every change in the economy has taken away workers’ bargaining power.

“From 2014 to 2022, most government policies took away workers’ bargaining power. That changed in 2022 when policies shifted the pendulum back some way towards workers. Now, wages have begun to turn around.”