That represents the third consecutive quarterly decline in relative labour compensation.

“A decline in the labour share of GDP indicates that workers’ wages and salaries are not keeping up with the growth of Australia’s economy,” explained Dr. Jim Stanford, Economist and Director of the Centre for Future Work. “And given that GDP growth itself was very anemic in the September quarter (expanding just 0.3%), that’s an especially weak result.”

The labour share of GDP is now on track to set a new record low for 2018, below even last year’s average of 47.1% – which was the lowest annual average labour share recorded since the ABS began gathering modern GDP statistics in 1958.

The weak growth of total wages reported in the GDP data was surprising, given the apparently strong increase in employment recorded over the past year. Labour compensation per employee increased by just 1.9% in the year ending in September, barely matching the increase in average consumer prices over that period. Wage growth in the private sector has been even slower.

Despite a decline in the official unemployment rate over the past year, wages have been held back by a combination of high underemployment (workers who want more hours of work), the growing share of insecure and part-time jobs, and the erosion of traditional wage-setting institutions (including collective bargaining).

With labour costs falling as a share of total output, profits have expanded. Corporate operating surpluses expanded by another 7.1% in the year to September, and reached their highest share of GDP (25.22%) since March, 2012.

The Centre for Future Work reviewed the long-term decline of the labour share of Australian GDP in a recent research symposium, published in the Journal of Australian Political Economy.