Monday’s MYEFO will apparently include yet another downgrade to forecast wage growth.
According to the September Wage Price Index, private sector wages rose by 2.2% in the year to the end of September. Public sector was a little better at 2.5%. Neither of them approach the 3.5% that had been predicted by Treasury in the 2016-17 budget or even the 2.75% forecast in April.
Josh Frydenberg predicted in the last budget that wages would grow by 3.75% next financial year. That is also sure to be cut tomorrow.
Meanwhile, corporate profits are booming. Despite “global headwinds”, over the last three financial years, profits have increased by 22.2%, 10.0% and 10.9%.
Whilst the CEOs and shareholders might be reaping the benefits, the workers whose labour produces this wealth are not.
The latest HILDA survey, which measures Australia’s Household, Income and Labour Dynamics, revealed an interesting fact.
Since 2009 and the global financial crisis, the average and the median (or typical) disposable income have moved in different directions.
The average household’s annual real disposable income has climbed by $3,156. The median household’s income has fallen $542.
This shows that the rich are getting richer.
As Alan Austin points out:
“Clearly, the big corporations are dining out while the majority of Australians are finding their income, wealth and quality of life gradually declining. The Coalition’s management of the economy is allowing foreign predators to extract Australia’s wealth with little or no return to the people of Australia, and to permit local corporations to escape the tax burden the majority of workers are unable to avoid. These policies are serving neither the economy nor the citizens.”
It’s all very well to aim to “grow the pie”, but most of us are outside looking in at the feast being shared by the privileged few.
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