News // Economics

August 2022

Interest Rate Hikes Will Hurt Workers to Protect Profits

by Anis Chowdhury

The Reserve Bank of Australia has hiked its interest rate 4 times so far this year, for a combined total of 1.75 percentage points. And it has signalled more increases are ahead, as it joins other central banks around the world in rapidly increasing rates to slow spending power, job-creation, and hence inflation.

July 2022

A decade of real wages growth lost as prices soar ahead of wages growth

by Greg Jericho in The Guardian

The latest inflation figures from the Bureau of Statistics reveal just how much workers have been left behind. Writing in Guardian Australia, labour market and fiscal policy director Greg Jericho notes that while the focus is on the biggest annual increase in inflation since the introduction of the GST, the data also shows that real wages have fallen drastically.

The Job Summit needs to produce a fairer labour market

by Greg Jericho in The Guardian

Despite unemployment at nearly 50 years lows, it will be little surprise to workers that wages growth is only at 3 year highs. Over the past decade the relationship between wages growth and unemployment has shifted such that levels of unemployment that would have once seen wages growing at more than 4% are now associated with growth of well below 3%.

June 2022

Profits push up prices too, so why is the RBA governor only talking about wages?

by Jim Stanford in The Conversation

Reserve Bank of Australia governor Phillip Lowe has invoked memories of the 1970s, warning wage growth must be restrained to contain Australia’s surging inflation. In the 1970s, Lowe said last week, “we got into trouble because wages growth responded mechanically to the higher inflation rate”. Now, with inflation above 5%, and tipped to reach 7% by the

Exit Poll: Overwhelming Majority of Australians Want Wage Growth in Line with Cost of Living

As the Fair Work Commission prepares to announce this year’s increase in the national minimum wage, new polling data shows that the vast majority of Australians support lifting wages to keep up with rising inflation. The Australia Institute conducted a special exit poll, surveying a nationally representative sample of 1,424 Australians on the evening of

Enterprise Bargaining System no Longer Fit for Purpose

by Alison Pennington

The collapse in agreement coverage under Australia’s enterprise bargaining system in Australia in recent years, particularly in the private sector, has focused attention on the need for reforms that will give more workers the effective ability to collectively negotiate better wages and conditions. In the private sector, coverage by a current enterprise agreement has fallen by half since 2013: to below 11% of all workers by March 2021. No wonder wages are lagging so far behind inflation.

May 2022

Joseph E. Stiglitz Australian Speaking Tour: July 2022 ‘The Role of Government in the Modern Economy’

Nobel Laureate, former World Bank Chief Economist, and best-selling author Professor Joseph E. Stiglitz will visit Australia in July 2022 to discuss the need to expand the role of governments, unions, and civil society. The tour, hosted by the Australia Institute, will see Professor Stiglitz speak at a wide range of events for the general

Unemployment Rate Does Not Tell the Whole Story

by Anis Chowdhury

Three days before the federal election, new ABS data confirmed that Australian wage growth is still stuck at historically weak rate (up just 2.4% year over year to March 2022). One day later, another ABS release showed another small decline in the unemployment rate, which is now below 4%. Most of the decline was due to people leaving the labour market (rather than new jobs being created). But the data is being cited by the current government as a sign that better wage growth is just around the corner.

More Resources on Australia’s Wages Crisis

The debate over wages, prices, and living standards heated up even further this week, with the release of new ABS statistics showing continuing weakness in wages despite the acceleration of inflation. The latest data from the ABS Wage Price Index (WPI) shows nominal wages grew just 2.4% over the 12 months ending in March. That is less than half as fast as consumer prices grew (5.1%), producing the biggest decline in real wages this century.

Webinar: Changes to the SCHADS Award and Next Steps to Improve Job Quality in Human Services

The Fair Work Commission recently announced important changes to the SCHADS Award (which sets minimum standards for workers in home care, disability services, community agencies, and other vital services) as part of its award review process. This culminates several years of research and advocacy by unions representing workers in these sectors, aimed at improving job quality and stability in these vital but undervalued positions. The Centre for Future Work provided expert testimony to the Commission as part of its review.

Real wages plummet and will take years to recover

by Greg Jericho in The Guardian

The release of the March Wage Price Index confirms what a horror year it has been for workers. While inflation in the past 12 months rose 5.1%, wages grew just 2.4%. Even worse, in the past year the price of non-discretionary items rose 6.6%, meaning for those on low wages, who spend more of their incomes on essential items, real wages would have fallen even more than the 2.6% average fall.

One in Five Worked with COVID Symptoms; Sick Leave Entitlements Must Be Strengthened

Almost one in five Australians (and a higher proportion of young workers) acknowledge working with potential COVID symptoms over the course of the pandemic, according to new opinion research released today by the Australia Institute’s Centre for Future Work. The research confirms the public health dangers of Australia’s patchwork system of sick leave and related

Wages Will Continue to Lag Without Targeted Wage-Boosting Measures: New Report

A comprehensive review of Australian wage trends indicates that wage growth is likely to remain stuck at historically weak levels despite the dramatic disruptions experienced by the Australian labour market through the COVID-19 pandemic. The report finds that targeted policies to deliberately lift wages are needed to break free of the low-wage trajectory that has

Why commentary that wages growing in line with inflation will drive up inflation is completely misguided

by Greg Jericho in The Guardian

Today the opposition leader, Anthony Albanese was asked about wages in the following exchange: Journalist: “You said that you don’t want people to go backwards. Does that mean that you would support a wage hike of 5.1% just to keep up with inflation? Anthony Albanese: “Absolutely”. Any other response would be to suggest that real

April 2022

We (still) need to talk about insecure work

by Jim Stanford and Mark Dean in The New Daily

Business groups and conservative media are happy to discuss insecure work as if it is nothing new – stable and part of a healthy economy that provides workers with independence. But this is not the case, with insecure forms of work – casual, gigs, temporary work and short-term contracts – taking up a growing share of jobs in Australia.

March 2022

General Enquiries

Tanya Martin Executive Assistant

02 6130 0530

mail@australiainstitute.org.au

Media Enquiries

Jake Wishart Senior Media Adviser

0413 208 134

jake@australiainstitute.org.au

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