Over the past year as prices and profits have soared and wages have fallen well behind inflation, many in the business community have suggested nothing is amiss. Although the share of national income going to profits is at record highs, they have argued that this is mainly due to mining and that nothing unusual is happening in the non-mining sector of the economy. Given this, they argue we should not blame profits for increasing inflation, nor even worry at all about the increased share of GDP going to profits.

But analysis of profits and wages over the past 3 years since December 2019 shows the total wages for all but 4 industries have risen by less than the increase in profits (measured by gross operating profits). These figures refer to private businesses by industry and exclude the not-for-profit sectors of Education and Health.  This data also includes both the corporate sector and unincorporated businesses.

Mining is definitely not the only industry where profits outpaced wages. Profit increase outpaced wage increases in 11 industries. In the “Other Services” industry (which consists mainly of providing buildings or dwellings repair and maintenance services) profits since December 2019 have risen an astonishing 187% compared to wages in the industry rising by just 13.7%. The Wholesale trade industry has seen a 74.4% rise in profits but just a 19.2% rise in total wages.

Total wages across the entire private sector increased by 18.3 per cent compared to a 53.9 per cent profit increase. If mining is excluded from these calculations, (as well as the not-for-profit education and health industries) wages increased by 17.9 per cent but profits increased by 33.3 per cent. So even without mining, profits increased by almost twice the increase in wages.

The data is clear – the increase in profits over the past 3 years is not merely due to mining, and workers are missing out on their fair share and companies are doing very well out of the current period of high inflation.