It’s not just mining: profits have increased by more than wages in almost all industries
Yes the mining sector has booming profits, but they are not the only businesses whose profits are growing faster than the wages of their workers
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.
Between the Lines Newsletter
The biggest stories and the best analysis from the team at the Australia Institute, delivered to your inbox every fortnight.
You might also like
Corporate Profits Must Take Hit to Save Workers
Historically high corporate profits must take a hit if workers are to claw back real wage losses from the inflationary crisis, according to new research from the Australia Institute’s Centre for Future Work.
It’s not just mining – non-mining profits have also driven inflation
As the Reserve Bank continues to raise rates, it continues to misread the nature of inflation that is being driven largely by profits.
Tasmanian Salmon Industry: Few Jobs, Less Tax
New research released by The Australia Institute today highlights the modest jobs numbers and tax payments by the Tasmanian salmon industry.