Supporting the independent education community

The wages drought


It’s no secret that wages growth across the whole country over the last few years has been sluggish (at best), with wages barely keeping up with inflation (and sometimes not even doing that). Wages have been stumbling along at around the 2% mark for over three years now, a far cry of the 4%+ increases on a decade ago.


There are several reasons for this – the decline of the mining boom, the 2.5% salary cap of the NSW government, and an industrial system that limits the actions that workers can take to improve their position. And it is not only a problem in Australia, with weak wages growth in most OECD countries.


The share of the economic output in Australia has dropped from about 58% in the years after the Second World War, to 47% today – and nearly all of this has gone from wages into profits. It’s no surprise that inequality is worsening.


This poor wages growth is not just a problem for workers. Governments rely on increasing wages to boost their tax coffers (as workers move into higher tax brackets), and so the Budget position is not as healthy as it might be with higher wages. Businesses, too, rely on increasing wages to fuel consumer spending.


Another reason to #ChangeTheRules!