News // Greg Jericho
August 2022
Market power costs consumers, workers and the whole economy
For most of the past 40 years whenever the discussion turns to the need to lift productivity, invariably the conversation is dominated by business groups and various media commentators who suggest the solution is more labour market flexibility. Just a bit more flexibility and productivity will improve!
The biggest real wages fall on record
The latest wages price index figures from the Bureau of Statistics reveal just how far workers ability to purchase items with what they earn has fallen.
The latest taxation statistics reveal the massive gender pay gap across the whole economy
The 2019-20 taxation statistics released this week by the ATO provide a plethora of data that reveals with precision the salaries of people by location, occupation age and importantly, gender.
Rate rises look set to dramatically slow the economy
The latest raise in the cash rate has meant interest rates have increased by more in 4 months than they have anytime since 1994.
July 2022
A decade of real wages growth lost as prices soar ahead of wages growth
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
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%.
Will “curing” inflation cause a recession?
Right now, the big numbers of the economy look pretty good. Unemployment in June was just 3.5% – the lowest since 1974. So why has consumer confidence crashed and why are so many Australians worried about a recession?
June 2022
Employer Arguments Against Minimum Wage Boost Don’t Hold Water
The Fair Work Commission has announced an important increase in the national minimum wage, which will rise by $1.05 per hour (or 5.2%) effective 1 July 2022. This represents a significant shift in the debate over wages in Australia, whichi have been languishing for years — and are now falling in real terms.
The recovery needs to deliver for workers
The latest labour account survey released by the Bureau of Statistics revealed that while job growth remains solid and the job vacancy rate is at record levels, workers real incomes remains at best flat.
GDP figures show workers are losing out
The March quarter GDP figures show that while the economy is growing strongly, workers are missing out of their fair share.
May 2022
Real wages plummet and will take years to recover
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.
To really address housing affordability we need to think differently
The current election campaign has seen the two major parties put forward housing policies, both of which to varying degrees are aimed at the demand side of the equation.
Real wages should rise – anything else means declining living standards
This week the election campaign has turned to discussion about the increase to the minimum wage, with suggestions that an increase either in line with the curent rate of inflation of 5.1% or marginally above it (such as the ACTU’s proposal of a 5.5% increase) would bring about a return to 1970s style wage sprials.
Why commentary that wages growing in line with inflation will drive up inflation is completely misguided
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
Rate rises are going to cause a housing affordability crunch
For most of the past decade the talk about housing affordability has focussed on house prices. As fiscal policy director, Greg Jericho notes in his Guardian Australia column, falling interest rates since November 2010 have made paying off a mortgage less onerous than it otherwise would have given the soaring house prices.
April 2022
High inflation means real wages have plummeted
The March CPI figures showing that inflation rose 5.1% over the past 12 months is not just the highest level since the introduction of the GST it also signals the biggest fall in real wages since then as well.
The election campaign needs to tackle climate change
In the week before the election campaign began the IPCC released its latest report that contained warnings that deep, rapid and sustained emissions reductions are needed to prevent temperatures from rising 1.5C or 2C above pre-industrial levels.
The election campaign needs to be more than a quiz show
The election campaign thus far has been dominated with gotcha questions that unfortunately have missed the vital need to examine the different policies on offer at a time when Australia’s economy is in a state of extreme flux.
House prices means interest rates do not need to rise much to inflict great costs
The more than a decade long period of the Reserve Bank going without raising interest rates looks set to end. Rising inflation and the unwinding of the pandemic restrictions and border closures means that the emergency cash rate of 0.1% will soon go up. But at the moment the market expects before the end of next year that it will rise to above 3%.
March 2022
A slap-dash budget revealing a government with no idea why it is in power
This year’s budget was transparently targeted towards the May election.
A short-term budget with no vision or coherency
The 2022-23 budget is one of the most shameless election year budgets in memory.
In next week’s budget watch out for the tax cut that won’t cut your tax
Next Tuesday, Treasurer Josh Frydenberg will deliver the 2022-23 budget. As it is only 2 months from the next federal election, the budget will be even more politically charged than usual.
Flat wages and booming house prices cause housing affordability to plunge
Since the stimulus measures introduced in 2020 to prop up the housing market during the pandemic, house prices have exploded. In 2021 property prices across Australia’s capital cities rose an astonishing 24%. Combined with the stagnant wages growth of the past 8 years, housing affordability has fallen dramatically.
Record number of people working multiple jobs reveals the problems for workers
The latest Labour Account figures from the Bureau of Statistics reveal that at the end of last year a record percent of people were working more than one job.
Australia’s Lopsided Economic Recovery
While the headline news of 3.4% GDP growth in the December quarter of 2021 might suggest the economy is bouncing back, Greg Jericho, Policy Director for the Centre for Future Work, has found that the national accounts reveal just how badly workers are missing out.
February 2022
Loss of Bargaining Power Explains Wage Stagnation
The latest wages data from the Bureau of Statistics shows that in 2021 real wages plummeted, with inflation raising by 3.5%, while wages increased just 2.3%.
Interest Rates and the Federal Election
For the first time in a decade the coming election will be at a time of increasing inflation and talk of rising interest rate. And while it is clear interest rates are always a political hot potato, Greg Jericho writes in his latest Guardian Australia column that we should not lose sight of the need for government support.
Digging Deeper Into Australia’s Unemployment Rate
Australia’s unemployment rate is poised to hit its lowest level in a half-century, and this has been heralded by the current government as an economic triumph. But the unemployment rate depends on many factors (including labour supply, hours of work, and others), and does not by itself assure that the economy is maximising its potential.
CPI Numbers Don’t Tell the Whole Story
With the rise in inflation as Australia’s economy struggles with re-opening and supply chain problems, each release of the Consumer Price Index (CPI) generates headlines and political debate. But the CPI doesn’t necessarily provide a full reading of price pressures: depending on who you are, and what you buy. In this column published in the Guardian Australia, Greg Jericho (new policy director for the Centre for Future Work) dissects several measurement issues related to this most-watched economic statistic.
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