The whole point of public-sector wage caps is to keep all wages down
It took roughly one day after the New South Wales election for conservative media groups to begin spreading fear about union power and public sector wage blowouts. But as labour market policy director, Greg Jericho writes in his Guardian Australia column these fears are massively overblown and also ignore the reality of how much workers have lost out over the past few years.
In NSW public-sector wages grew just 2.5% in 2022, well below private-sector wage growth in that state and massively below inflation which rose 7.6% in that state last year.
Public-sector wage caps were notionally introduced to get the budget back into surplus, but that was just a fib – once the budget returned to surplus the caps remained. The purpose of the wage caps has always been to drive down private-sector wage growth, a point made abundantly clear by former Treasurer Matt Kean when he told an audience at a Business NSW function that removing the public-sector wage cap would see their companies “competing for labour against the public service who were paying huge wage increases.”
But the reality is the wage cap not only keeps private-sector wages down it has smashed the living standard of public sector workers whose real wages are now more than 5% lower than they were 2 years ago.
The fear of wage rises must stop.
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
“Shocking” near-zero growth a sign that rates are hurting the economy – Jericho
High interest rates have dramatically slowed the economy, pushing many households to their limits, says Greg Jericho.
Analysis: Will 2025 be a good or bad year for women workers in Australia?
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
Cashing in on a crisis
Super profits have driven up inflation, robbing all but the wealthiest Australians, says Greg Jericho.