Wages are growing at their fastest pace in a decade. However, inflation is growing at twice the rate, delivering a huge hit to workers’ real incomes.
Australians are enduring the biggest fall in real wages on record, with new data prompting accusations the Reserve Bank’s sharp increase in interest rates to head off a wage-price spiral is causing unnecessary economic pain to ordinary workers.
The Reserve Bank, as recently as its quarterly outlook on the economy, noted the importance of avoiding a price-wage spiral driven by the price-setting actions of businesses and a sharp increase in pay packets. Australian Council of Trade Unions secretary Sally McManus said the figures showed the Reserve Bank had again misread the state of the jobs market and its impact on wages.Alex Ellinghausen
“Adjusted for inflation, Australian wages have fallen by 4.2 per cent over the past year and by 6.8 per cent since their peak,” he said.
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