Underutilisation is at 40 year lows; wages are not even at 10 year highs

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.

In the past year real wages fell so far they are now back to 2012 levels.

The lack of workers is the major reason for the flight delays and airport wait-times. People are back travelling, but the air travel workers are not.

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.

The latest raise in the cash rate has meant interest rates have increased by more in 4 months than they have anytime since 1994.

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.

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%.

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?

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 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.

The March quarter GDP figures show that while the economy is growing strongly, workers are missing out of their fair share.

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.

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.

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.

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

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.

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.

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 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.

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%.

This year’s budget was transparently targeted towards the May election.

The 2022-23 budget is one of the most shameless election year budgets in memory.

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.

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.

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.

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.

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%.

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.