The Australian Bureau of Statistics has released figures on Wednesday that indicated Australia’s wage growth has reached its lowest at 2.2 percent in 2015 for the first time since 1997, when the regulator began its wage price indexing.
The rate was a bit more than the inflation rate recorded at 1.7 percent. The figures showed that the cost of living was becoming more than incomes in recent times. However, Essential Research conducted a recent study in which only half of the respondents agreed that the income was less than the cost of living in the nation. The ABS report also fuelled speculations of Central Bank of Australia to introduce some measures to simplify the lowering rate of growth of wages for Australian workers.
According to the ABS, pay rates per hour increased by 0.5 percent excluding bonuses in the last three months of 2015, which accounted to 0.6 percent in the previous quarter. Analysts have mentioned the soft wage growth as a “mixed blessing.”
“On the one hand it’s a drag for household income growth and hence consumer spending,” Sydney’s Amp Capital’s chief economist and investment head Shane Oliver said as quoted by BBC. “But on the other it’s helping limit the upwards pressure on unemployment and helping to further improve the competitiveness of the Australian economy. It also means that there is no inflationary pressure coming from wages.”
According to The Guardian, the wage growth observed in mining and construction sector was the lowest, which was a situation completely different from a few years ago where resources investment, including accommodation and food services, was booming. ANZ’s economist Justin Fabo has claimed that the wage growth will remain so due to the rising level of unemployment and downward pressure on nation income as well as low-inflation speculations.
Engineers Australia’s Chief Executive Stephen Durkin, seeing the decline in engineering work to almost a quarter in the past three months, said that there is a need for proper planning in case Australia aimed at getting out of the “boom/bust cycles.”
Shadow Treasurer Chris Bowen criticised the coalition government, saying that the living standards had declined by 3.5 percent since Coalition took office in September 2013. “Instead of delivering a long-term economic plan that will increase living standards, the Coalition has preferred to increase the cost of living through its attack on penalty rates and slashing family tax benefits for low-income households,” he said.