Share

Originally published in The Guardian on May 19, 2022

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.

Labour market policy director, Greg Jericho notes in his Guardian Australia column that the fall in real wages has been the worst since the introduction of the GST and in the first 3 months of this year real wages fell 1.5%.

So steep has been the fall that real wages are now back essentially to where they were at the time of the September 2013 election.

The fall highlights that talk about Australia having recovered from the pandemic ignores the most basic aspect of the economy – the living standards of workers from their wages.

The fall is such that even with the RBA’s estimates of solid wage growth recovery over the next two years, should Australia return to pre-pandemic trend real wages growth, it would take till 2031 to recover workers purchasing power back to the levels of 2020.

That would we a lost decade of living standards.

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

Analysis: Will 2025 be a good or bad year for women workers in Australia?

by Fiona Macdonald and Lisa Heap

In 2024 we saw some welcome developments for working women, led by government reforms. Benefits from these changes will continue in 2025. However, this year, technological, social and political changes may challenge working women’s economic security and threaten progress towards gender equality at work Here’s our list of five areas we think will impact on