The treasurer promised a “confronting” economic statement, but it held out hope of only a short spike in inflation and a recovery in real wages.
Dark warnings about rising labour costs ignore the importance of profits in driving higher prices.
Lifting wages will be a priority for the Albanese government to ease the cost of living. But the unions and the Greens are likely to push for more changes to tackle problems with the Fair Work system.
Michelle Grattan discusses the political week that was with Emma La Rouche from the University of Canberra’s Media and Communications team
The buying power of wages shrank a record 2.7% over the year to March, calling into question assurances about the link between low unemployment and high wage growth.
The buying power of wages began slipping mid last year year. The wages share of national income has been sliding since 2016.
Of the news on prices, wages, interest rates and unemployment, only the unemployment update looks set to be positive for the Coalition.
Australia’s Reserve Bank no longer says it is patient, but it is unlikely to move move until it sees widespread higher wage growth.
For the first time, there’s almost one job vacancy for every unemployed Australian. But that isn’t translating to better wages.
Away from the states bouncing out of lockdown, spending growth was weak. The next figures, to be released after the election, might show the economy turning down.
Unemployment is far lower than predicted and isn’t setting off the kind of inflation seen in the United States. There’s no telling how much lower it can go.
Attributing Australia’s economic success to closed borders runs the risk of leaving us with the wrong lesson the next time the things turn down.
The Conversation’s expert panel predicts prices will rise faster than Australians’ pay can keep up in 2022 – and that’s not their only concern about the local economy.
Small businesses are less productive, less innovative and pay staff less than big ones, and even before the pandemic they were shedding jobs.
True wages growth, and true price growth, is probably less than the official figures suggest – meaning there’s no need for alarm about inflation in Australia.
Jobs, economic growth, wages growth and even home price growth are likely to look less threatening by the time we are asked to vote.