Wednesday 17 July 2019

No you weren't imagining it - wages are stagnating in Australia


Whenever the Fair Work Commission reviews the minimum wage, one of those making a submission* to keep any increase in the minimum wage a modest one will be the Abbott-Turnbull-Morrison Government.

By way of example:
https://www.fwc.gov.au/documents/sites/wagereview2014/submissions/ausgovt_sub_awr1314.pdf
First 5 points in a 12 point statement of Australian Government's position
https://www.fwc.gov.au/documents/sites/wagereview2015/submissions/austgov_sub_awr1415.pdf


This is the result.......


As the asset-driven wealth gap has widened, incomes generated by employment have failed to keep up.

Average weekly disposable household incomes have grown just $44 over the past decade. In the four years to 2007-08, average weekly household incomes grew by $220. They dipped in the immediate wake of the global financial crisis before reaching $1067 in the 2013-14 survey. They fell in the next survey and rose $8 a week to $1062 in the 2017-18 survey.

In NSW, those in the lowest 20 per cent of income earners have seen their incomes go backwards in real terms since 2015-16, from $412 a week to $397 a week. They are only $6 a week higher than in 2011-12. The biggest increase has been for people in Tasmania, where disposable incomes jumped $83 to a record-high $922, with households across all income ranges boosted. The largest slump has been in Western Australia, where disposable incomes are $157 lower than their peak in 2013-14. [my yellow highlighting]

However, lest Australian voters seek to blame the Abbott-Turnbull-Morrison or any employer lobby group for paltry wages growth, the Australian Treasury and participants at a recent conference organised by the rather esoteric Economic Society of Australia - est. in 1925 and delighting in producing articles such as "Community and Expert Wine Ratings and Prices" and "Non‐monotonic NPV Function Leads to Spurious NPVs and Multiple IRR Problems: A New Method that Resolves these Problems" - have rushed to the defence of both government and the business community.

With Treasury in particular pointing a finger at employees, who are reluctant to quit their current jobs and chance their arm in an uncertain labour market, as a possible cause of low wages growth.  
So there you have it. Despite both the federal government and employer groups constantly pushing to limit wages growth, it's really the fault of workers. 

Regardless of the fact that productivity growth mainly from workers' efforts has averaged 1.4 percent a year since the end of 2010 having risen at a relatively steady rate since 1991.

Note:
* See https://www.fwc.gov.au/awards-agreements/minimum-wages-conditions/annual-wage-reviews/annual-wage-review-2017-18-3. Go to right hand sidebar, open a wage review link, select Submissions &  then click on Initial Submissions.


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