New research from the Centre for Future Work at the Australia Institute has shed further light on the role of higher corporate profits in driving higher prices in Australia since the COVID pandemic.

The Australia Institute surveyed a nationally representative sample of 1,001 Australians about their views on wages and cost of living. The majority of Australians report that their wages have not kept up with the cost of living over the past 12 months. For two in three Australians (68%) their wages have either not grown at

Since 2012 the NSW government has arbitrarily suppressed pay gains for workers in state-funded public services (including health care, education, public administration, emergency services, and more). At first those pay caps were justified as a deficit-reduction measure, and then later as being supposedly tied to inflation trends. But both those arguments have been discarded, given state surpluses in most years since the cap was introduced, and now the dramatic acceleration in inflation (now running more than twice as fast as allowed compensation gains).

Seafarers perform difficult, often dangerous work that is essential to the operation of global supply chains, delivering all the merchandise we take for granted in modern life. Yet because of the legal vacuum governing international marine traffic, a lack of resources and attention for enforcement by national regulators, and the corporate strategies of shipping companies and their customers, seafarers are subject to some of the worst exploitation and abuse of any occupation in the world economy.

The new Commonwealth government is hosting a major Jobs Summit in September 2022, bring together representatives from a range of stakeholder groups to discuss the challenges facing Australia’s labour market, and how to achieve strong employment, job quality and security, and better skills and training opportunities.

Labour costs have played an insignificant role in the recent increase in inflation, accounting for just 15 percent of economy wide price increases while profits have played an overwhelming role, accounting for about 60 percent of recent inflation.

The recent federal election featured important debate regarding the rising cost of living in Australia, and whether and how wages should be boosted to keep up with higher prices. One exchange, late in the campaign, occurred when ALP leader Anthony Albanese stated his belief that wages should keep up with prices — but then was

Firms like Woolworths would have still seen profit growth if they paid all of their workers a five percent pay rise and did not increase prices.

Wage growth played no significant role in the recent surge in inflation and, as the analysis shows, maintaining real wages across the entire economy as distinct from merely maintaining the minimum wage in real terms would have a trivial impact on the price level even if firms seek to recoup all of a nominal wage rise as further price increases.

A comprehensive review of Australian wage trends indicates that wage growth is likely to remain stuck at historically weak levels despite the dramatic disruptions experienced by the Australian labour market through the COVID-19 pandemic. The report finds that targeted policies to deliberately lift wages are needed to break free of the low-wage trajectory that has

The Victorian Government’s policy of capping of local government rates revenue in Victoria is a regressive move on economic, social and democratic grounds. By arbitrarily tying the growth in total rates revenue in each local government area to price indexes, the state government restricts the ability of local governments to respond to the COVID-19 crisis

COVID-19 containment measures have suspended large sections of the economy. Governments have committed over $220 billion in income supports to workers and firms. The $130 billion JobKeeper wage subsidy scheme is the most extensive “shock absorber” (with worrying exclusions of many casual and migrant workers). With the scheme now in place, assessment of the government’s COVID-19 measures is now shifting to implementation. This includes effects on the laws and regulations governing wages and how businesses and employees (and their unions) interact to determine the terms and conditions of employment.

The Commonwealth government’s proposed JobKeeper wage subsidy scheme represents an important and promising response to the COVID-19 shutdown of several key sectors of Australia’s economy. The scheme would support an estimated $130 billion worth of wage payments over the coming 6 months, keeping millions of Australians in jobs even if their employers experience major revenue losses from the restrictions that have been imposed on activity, mobility, and work during the pandemic.

The Centre for Future Work has made a submission to the 2020 annual wage review conducted by the Fair Work Commission. The submission compiles evidence showing that the annual minimum wage adjustments (which flow through into wages specified in the Modern Awards, as well as some enterprise agreements and individual contracts) have played a more important role in recent years in supporting the overall level of wage growth in Australia’s labour market. Without relatively strong minimum wage increases since 2017 (of 3% or higher for three consecutive years), Australian wage growth would still be languishing at all-time record lows of under 2% per year.

In this context, the Centre argued it is vital the Commission proceed with a normal, healthy minimum wage increase for 1 July, 2020, with full flow-through into Award wages. Otherwise wage growth will slump significantly (to an estimated 0.7%, or even lower), heightening the risk of economy-wide deflation.

New research from the Australia Institute’s Centre for Future Work reveals the consequences of freezing public service pay, both for public sector workers and for the broader economy.

New research from the Centre for Future Work has dramatised the lasting consequences for workers’ lifetime incomes – even after they retire – of wage freezes.

A wage freeze is often described as a “temporary sacrifice,” that supposedly ends once normal annual wage increments are restored. However, this report confirms that the legacy of even a temporary pay freeze is a permanent reduction in lifetime incomes and superannuation, which can easily ultimately result in hundreds of thousands of dollars of lost income. These long-term effects are illustrated with reference to a real-world example: an 18-month pay freeze imposed on workers at Jetstar in 2014-2016.

The latest economic statistics have confirmed that Australia’s economy is barely limping along – with quarterly GDP growth of just 0.4%. One of the weakest spots in the report was consumer spending, which recorded its weakest performance since December 2008 (amidst the worst days of the Global Financial Crisis). This was despite the supposed benefit of recent Commonwealth government tax cuts in boosting disposable income and stimulating more spending.

Analysis from Dr. Jim Stanford shows that the tax cut is in fact completely invisible in the macroeconomic data.

New research from the Centre for Future Work shows that scheduled increases in employers’ minimum statutory superannuation contributions would have no negative effects on future wage growth, and that Australia’s economy can afford both higher wages and higher employer contributions to superannuation.

The Centre for Future Work has released new research estimating the negative impacts on wages and spending power of the Victoria government’s proposed 2% cap on wage increases for the state’s large public sector workforce.

July 1 marked the implementation of the next stage of reduced penalty rates in the retail and hospitality industries in Australia. It is now two full years since the first reductions were imposed for Sunday and holiday work in several segments of retail and hospitality. Once fully phased in, these reductions will reduce wage payments in the two broad industries by an estimated $1.25 billion per year – at a time when concerns over weak wages and their impacts on the Australian economy are growing.

Australia’s economy continues to endure historically slow growth in wages and salaries, that is undermining household incomes, consumer spending, and economic growth. The Commonwealth government continues to predict an imminent rebound in wages – like in its most recent budget, where it yet again forecast wage growth accelerating quickly to 3.5% per year. But is the government willing to actually do anything to support wages?

New analysis of income tax data confirms a dramatic slowdown in Australian wages in recent years – and the slowdown is worse than previous statistics indicated.

Tomorrow the Australian Bureau of Statistics will release its quarterly Wage Price Index: the most commonly-reported measure of wage growth in Australia’s labour market. Given the importance of public debates about wages and wage policy in the current federal election campaign, this release is timely and politically important.

This briefing note reviews some methodological issues related to the WPI. It also considers recent data confirming the visible impact on the WPI of last year’s strong increase in the national minimum wage.

Many Australians are eagerly anticipating a unique concentration of public holidays in coming days. There is a ten-day period (stretching from Good Friday through Sunday, 28 April) during which many employees only have to work three days. Many Australians are now arranging to take those three days off: creating an extended 10-day holiday for the “price” of just three days leave.

This week’s pre-election Commonwealth budget will feature reductions in personal income taxes, as the Coalition government tries to overcome a disadvantage in the polls in the coming federal election. Public debate in recent weeks has been focused on the economic and social hardship caused by the unprecedented slowdown since 2013 in Australian wage growth. It is likely that the government will portray its personal tax cuts as a form of “compensation” for slower wage growth.

New data on private-sector business conditions confirm that wage increases paid in the private sector of Australia’s economy continue to plumb record lows. The ABS’s quarterly Business Indicators report, released yesterday, indicates total wages and salaries paid out by private businesses grew 4.3 percent in the September quarter, compared to year-earlier levels. This only slightly

The share of total economic output in Australia that is paid to workers (in the form of wages, salaries, and superannuation contributions) has been declining for decades. Workers produce more real output with each hour of labour (thanks to ongoing efficiency improvements and productivity growth), but growth in real wages has been much slower –