Australia’s lack of real wage growth misses the point
With Australia’s bastion of centre-left economic thought, the Age, publishing a hand-wringing article this morning on declining living standards and the lack of real wage growth since 2009, it’s worth reflecting on the actual reasons for the malaise — reasons that are almost never argued because they cut across shibboleths on both sides of politics, as well as special interests.
Take health care, child care, education and energy — the leading four of the five cost-of living items the article singles out as dramatically outpacing CPI while claiming an increasing proportion of worker’s expenditures (add finance, given its effective growth in wallet share): they embody, variously, a huge and rising level of regulation, political revolving door involvement, rampant credentialism and interest group lobbying as well as the delivery of lightly contested margins to well connected commercial participants.
Let’s also not forget that mandated retirement savings now take 9.5% of worker’s gross salaries (it was 4% at the inception of the super guarantee), a wealth transfer to fee seekers holding assets in essentially passive financial investments.
It’s long past time for a real debate (that includes real workers) on these issues and more: