The latest Statement on Monetary Policy confirms that workers have been the losers of rising inflation and the victims in the battle to contain it.

In February, the Reserve Bank estimated that wages would be growing annually by June this year at a rate of 4.1%. That has been downgraded to 3.8%, as has the estimate for growth to December this year from 4.2% to 4.0%. While the Reserve Bank is now forecasting lower inflation growth, the overall hit to real wages is worse because the downgrades in wage growth out to June 2025 are greater than the downgrades to inflation.

These figures completely destroy the suggestions that we need to worry about wage-price inflation. Not only are real wages forecast to continue falling until the middle of this year, but by June 2025 the value of real wages is now forecast to be just 0.4% above where it was at the end of last year. This is even worse than the pathetic 0.6% increase the RBA was forecasting in February. The Reserve Bank noted on wages that “Timely indicators suggest that wages growth was solid in the March quarter, though there appears to be less upward momentum than a few months ago”. It appears the wait for a wage breakout will have to continue.

Despite lower inflation than was predicted in February, workers will find themselves in the middle of 2025 with their wages being expected to be worth less in real terms than the RBA predicted in February. They now predict real wages to be lower in June 2025 than they were nearly 15 years earlier in December 2010.

And with such meagre growth of real wages expected over the next two years, it will take decades for workers to recover that lost value in their living standards.

The figures highlight the need to promote strong wage growth and end the fear that wages are driving inflation and that workers must be the ones to suffer through lower wage growth and higher unemployment in order to reduce inflation