Australia – lowest nominal wages growth on record leading to significant real wage cuts

It’s Wednesday and I usually don’t write much on my blog. But today, history was made and so I thought I should at least cover it. Today (November 18, 2020), the Australian Bureau of Statistics (ABS) released the latest- Wage Price Index, Australia – (September-quarter 2020). The ABS reported that while “the September quarter is generally a quarter of solid wage growth … the impact of the COVID-19 pandemic contributed to a subdued rate of wage growth in the September quarter 2020”. However, they might also have said that today’s result was “the lowest quarterly growth in the 22-year history of the WPI”. Private sector grow was just 0.1 per cent and public sector growth was just 0.2 per cent. The overall WPI growth was just 0.1 per cent. With the quarterly inflation in the September-quarter was recorded at 0.693 per cent, real wages thus fell for Australian workers. Further, over the longer period, real wages growth is still running well behind the growth in GDP per hour (productivity), which has allowed profits to secure a substantially increased share of national income.

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