Economy

May 16, 2018

Wage growth shocker leaves workers struggling to keep up

Another bad wages growth number shows Australian workers struggling to keep ahead of inflation, and in some major sectors, going backwards, Glenn Dyer and Bernard Keane write.

Glenn Dyer and Bernard Keane

Crikey business and media commentator / Politics editor

Back in February, one or two excitable commentators suggested Australia had "turned the corner" on wages growth in the December quarter. If that was the case, we certainly went back around it again in March, with another shocker of a result delivered today.

According to the Australian Bureau of Statistics, wages grew overall by 0.5% for a 2.1% annual growth rate -- the same as in the December quarter. But in the march quarter, public sector wages growth -- the reason for the tiny uptick at the end of last year that got optimists excited -- declined slightly to 0.5%/2.3%. The rest of us in the private sector are stuck in neutral, with unchanged growth of 0.5% and 1.9% for the year.

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6 comments

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6 thoughts on “Wage growth shocker leaves workers struggling to keep up

  1. AR

    Same-old, same-old – the well paid must be paid more so that they’ll work harder, the poor must be paid less else they’ll not work hard enough”.

  2. Lasso

    Can someone explain to me why any article about the “wages growth slump” ignores any reference to our national immigration program for skilled labour?? Seems to me you are avoiding the elephant in the room. My point being, it’s a buyers market for employers. Especially when hiring skilled professionals. I would suggest you do some statistical analysis on HR figures regarding the growth of applications for typical white collar professional jobs. If a local applies for a job or wants a pay rise, there are hundreds/thousands of applicants from overseas who will happily take the job for lower pay. There is no wage growth for white collar jobs as we have an oversupply of skilled professionals pushing down the market rate for the majority of industries. Unskilled labour jobs (e.g. building and construction) – which due to the bias towards skilled over unskilled labour immigration and the heavy protection of unions – are now equal with and/or out competing their professional counterparts. Had I my time again, I would not have wasted money on going to university. My friends who dropped out of Engineering Studies and became plumbers, sparkies, carpenters, etc. have fared much better than any of my University educated peers over the past 10-15 years. Yes, you can argue that not everyone should go to University – which to be blunt is more the fault of the contemporary business model surrounding profiteering off higher-education – but I challenge you to name me some international examples where a sparky, bricky, traffic controller, etc. can easily make more in annual salary than an Engineer or other similar profession? Yes, we are a country of increasing inequality, but this challenge is not helped by devaluing education.

  3. BeenAround

    The LNP government’s dishonest and ‘heroic’ assumptions about future wage growth are the product of the religious belief in market economics, both neo-classical and neo-liberal; ie the deluded assumption that economics follow rules and patterns despite almost all the core assumptions of that brand of economics having been disproven over the past 40 odd years. The dishonesty arises from the LNP’s deliberate memory failure that its attacks on the rights of labour since the first Howard government are pretty clearly the dominant reason why wages have stagnated over that period, the purpose expressly articulated in the past by the LNP for those attacks. Unless, before the next election, the electorate realises that neo-liberal politics is a race to the bottom for 90% of us and that interests of humans are no aligned with business, the next 4 years will be awful.

  4. bushby jane

    I wonder if Abbott’s initiative of setting the bar really low for commonwealth workers’ wage rises in 2014 (didn’t parliament house’s cleaners’ wages actually go down?) have any effect on rises for other’s wages?

  5. Metal Guru

    Yes we have wages stagnation. It is a deliberate strategy. Following on from the formation of the FWC, the watering down of Workchoices with the FWA (aka WorkChoices lite), there has been a deliberate strategy by government assisting employers in depressing wages. The right to strike is very limited. Industrial action of a substantial nature is delayed until other avenues favourable to employers have been exhausted and then not till late in the piece while the employers has all the time in the world to summon up an army of scabs to undermine industrial action. No rolling stoppages until after years of negotiation. Employers are not nice or generous people. They do not and will not hand over wage increases out of the goodness of their heart. They have to be compelled to. I include government agencies in the employer category as the DIBP and their employees are still waiting to have a decision handed down by the FWC after not having a wage rise for nearly 5 years.
    The depression of wages was a Howard strategy in the wake of the mining boom whereby wages were increasing, granted by the government bureaucracies and the Arbitration Commission and creating shortages in industries where employers couldn’t get applicants without offering substantial incentives. Changing the industrial landscape was one strategy to depress wages. increased part time and casualisation but especially contracting of work are also playing a major part in this. This is the economic landscape which has changed. Another strategy – part economic, part social and part cultural – is to flood the country with temporary and other long term immigrants to compete for jobs and lower wages – particularly for unskilled-semi-skilled workers across all sectors. The rorts in the tourism and immigration industries and sectors are a business model -7/11, uber and conventional taxis, dark kitchens and uber eats, backpackers in farming, 457s in so-called skilled shortage areas which are really employer sponsorships for desperate overseas workers who can’t get work in their own country so they undercut the wages and conditions of workers in their respective fields in the local market.
    I’ so glad I’m in my late 50s. I would be screwed if I were 20 or even 10 years younger. It shouldn’t be up to parents to support their kids throughout much of their adulthood. Mine didn’t. They didn’t need to. much history can be made of the situation we find ourselves in but it is a situation mainly made by employers in cohoots with governments.

  6. klewso

    Does wage stagnation really matter? With “all these new jobs” being created : we’ll simply have to work three or four of them to make a living?

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